GM Veep LaNeve: "Nearly" 60 GM Dealers Get Reprieve

Hmmm. One wonders about the veracity of LaNeve’s excuse for allowing “nearly” 60 dealers to avoid termination. Who created the “incorrect or inaccurately reported dealership financial data” upon which their second lease on life was—allegedly—based? Given that dealers fighting for their survival wouldn’t under-report their financial data, common sense suggestd GM’s auditors are responsible for the, dare I say it, mistake. So, how did GM screw it up for “nearly” 60 dealers? And surely that boner throws doubt on the rest of the dealer appraisals ( view criteria here). Fuel for the fire for H.R. 2743. In short, GM is still run by the Gang That Couldn’t Shoot Straight. Make the jump for official dealer com from Dr. Death. [Thanks to you-know-who-you-are for the email.]

IMPORTANT MESSAGE AND UPDATE ON DEALER NETWORK PLANS

To All GM Dealers:

As promised, we committed to communicating with you as often as possible on our progress and any critical issues as we go through our restructuring. A couple of important things:

First of all, almost 100 percent of the GM dealers who were offered a participation agreement have signed and returned those documents. I am very gratified by this support GM dealers have shown for our restructuring efforts. As to those dealers offered wind-down agreements, 98 percent have been signed and returned. We know these are tough circumstances, but are pleased at this overwhelming response. In addition, we have finished reviewing all the dealer appeals to the wind-down decisions and have reversed nearly 60. The primary reasons for reversals were incorrect or inaccurately reported dealership financial data that skewed the DPS [Dealer Performance Score] score.

Also, we sent HUMMER, Saturn and Saab dealers deferred termination agreements late last week given various MOUs executed with respect to a sale of those businesses. Finally, we also announced the phase out of our Medium Duty Truck business and sent those dealers wind-down agreements as well. As a result, every GM dealer has now been contacted and is in receipt of the appropriate documents. Importantly, there is no need for any further wind-down or participation agreements….our network restructuring process as we emerge from the 363 bankruptcy is complete.

Please remember that if you signed a wind-down or participation agreement those agreements and the GM Sales and Service Agreements will go forward to the new GM if approved by the bankruptcy court. We are especially pleased that we were able to have (also subject to court approval) the dealer indemnification provisions of Article 17.4 of the Sales and Service Agreement to apply to all dealers who executed participation or wind-down agreements.

We very much appreciate your prompt response to this critical activity. We would have ideally provided more time but the need to emerge quickly from bankruptcy made expediency a requirement.

I can tell you that the restructuring of our dealer body has been a difficult, emotional and highly publicized aspect of the reinvention of the new General Motors. For the most part, dealers believe our wind-down process and associated financial assistance was dignified and appropriate given the overall difficult circumstances and certainly better than typical outcomes in bankruptcy. Additionally, we really appreciate the support of the dealers going forward with GM, including our National Dealer Council (NDC). It is obvious that you are solidly behind our plans to improve dealer sales throughput, profits and franchise value. The hundreds of notes of support you have sent are all greatly appreciated.

We have been diligent throughout the process to respond quickly and openly to your concerns. For example, following feedback from the National Automobile Dealers Association and the National Dealer Council, I sent a letter to all dealers who received a participation agreement clarifying legal language and expectations. Duane Paddock of Paddock Chevrolet and Chairman of the NDC testified regarding this action, to a congressional committee last week saying that, “these modifications illustrate GM’s ability to quickly react to dealer concerns.”

I also know from hundreds of other notes and phone calls how traumatic this experience has been for the dealers who signed wind-down agreements. There is probably nothing I can say to make you feel any better. I can only assure you we had an objective and fair process and we will continue to work hard to make this transition as smooth as possible.

We are now starting to shift our focus to emerge as the new GM with a great plan, great products and intense focus on our customers. We remain committed to working together, and cooperatively, with you to build a strong, competitive dealer network. It is this simple – a strong dealer body is absolutely essential to the success of the new GM. We succeed together.

I also want to thank you for your continued sales efforts during this challenging time. May was our best month of the year and June is running well ahead of May. In fact, June should be our strongest retail month by far of 2009. Fleet will be off a planned 50% but retail appears to be improving along with consumer confidence.

Thank you for all you do. Keep selling.

Mark LaNeve

GM North America Vice President

Vehicle Sales, Service and Marketing