By on July 11, 2009

When TTAC received a copy of GM’s letter to dealers “asking” them to lobby against the dealer cull rollback bill, we blogged it as a “loyalty oath.” More than a few commentators said pish-posh [paraphrasing]; H.R. 2743 was nothing more than an SOP lobbying campaign. The fact that the letter told dealers to cc GM’s National Dealer Council Chairman Duane Paddock left little doubt in our (OK my) mind that New GM’s dealers were being told in no uncertain terms to toe the New company line (i.e. shiv their former colleagues). Automotive News [AN, sub] reports that “General Motors executives have been pressuring individual dealers to sign a statement saying they oppose legislation that would restore terminated dealerships’ rights, according to a U.S. senator, a dealers group and dealer representatives.” Point counterpoint after the jump.

“Some dealers fear that GM could take action against them if they do not sign a letter of opposition” to the bill, Grassley said in a letter to GM CEO Fritz Henderson. “It’s alarming to have GM corporate leaders force dealers — some who are losing everything they worked hard to build — to take an active stand against it.”

GM’s Washington spokesman Greg Martin’s e-mail reply: “Many dealers who signed participating agreements are ready to move forward, and so are we as a new company. Certain proposed legislation puts our progress and viability at risk. We have a right to have our voice heard, too, and we look forward to responding to Senator Grassley’s letter.”

So nothing about blackmail, then. Well, except from New GM dealers . . .

Three dealer representatives said that they had received complaints from a total of about 20 individual dealers who had been contacted by GM managers.

“They felt tremendous pressure to sign the form,” Don Hall, head of the Virginia Automobile Dealers Association, said in an interview today. He said he received complaints from 10 to 14 Virginia dealers.

im Jackson, head of the Colorado Automobile Dealers Association, said he had received similar complaints from about a half-dozen retailers in his state.

“Some had received three or four calls each from GM asking them to sign the letter and then to call back when they actually sent the signed statement,” Jackson said in an interview.

Jim Moors, franchising director at the National Automobile Dealers Association, said he got several calls from dealers who complained “that they felt coerced” by calls from GM offices.

Question: why is New GM treating its dealers like this? Someone ought to send them a copy of How to Win Friends and Influence People, stat. Not that I’ve read it . . .

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6 Comments on “New GM Taking Heat for Loyalty Oath...”

  • avatar

    GM is stupid. Nothing new there. There’s nothing stopping a dealer from signing the stupid form letter and then contacting their local congressman and senators you know the ones they actually send checks to in the form of contributions and telling them to ignore that stupid form letter petition with my name on it. Heres what I really want you to do. If they are big contributors I’m sure their direct call will be taken.

  • avatar

    it’s because they eventually want to own distribution and are actively on a mission to rid themselves of dealers. when the body gets small enough, look for the “Mother of all Mergers”. why do you suppose Bill Gates, Michael Dell, and Ed Lampert are buying stores? they will participate in the conglomerate along with the bigs guns like Auto Nation.

    years ago I wrote that GM was out to relocate production to other countries, sell cars direct online, and rid themselves of union payscales. they would drive the company purposely into bankruptcy after stripping assets, eliminate pensions and health care benefits, and then resurface under the ownership of the same banks. I could see them intentionally driving GM into the ground. remember stupidity isn’t that sequential.

    Wake Up America, you’ve been conned.

  • avatar

    Everybody’s still in denial of the fact that there are too many dealers for the remaining brands/sales.

    The writing has been on the wall – what ever form the culling takes, everybody knew it would be ugly, as the dealers (good, bad or in-between) are entrenched interests, and that’s (one reason) why the bankruptcy was allowed to happen.

  • avatar

    I really believe that the surviving dealers want the cut dealers to be uncut, competition be damned

  • avatar

    further proof as to my theory – Camaro. GM makes a hot car, only gives the dealers the smallest of margin even though the market will bear a higher price. result? dealers charge over list by thousands and customers pay it. end game? dealers get bad image and the perception becomes it would be an improvement to cut out the middle man and buy direct.

    Robert, can I have my tin foil hat back now please?

  • avatar

    “This sort of thing was normal procedure in the USSR.

    Why are we copying that system?”

    For the same reason we elected Barack 0bama, and for the same reason we elected Democrat senators and representatives who pass legislation aimed at centralizing power in the federal government.

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