Cadillac President Will Pay Dealers to Disappear

Steph Willems
by Steph Willems

If dealership owners spring for a recent offer by the president of Cadillac, expect to see a vastly reduced brand presence in towns and cities across the U.S.

Johan de Nysschen is offering 400 low-volume Cadillac dealers cash to close up shop and walk away, Automotive News reports.

It’s nothing personal, the brand’s performance-focused leader claims — just business.

In an interview with AN, de Nysschen claims the brand has too many dealerships as it is, at least when compared to its luxury rivals. Paring down the herd, even significantly (the 400 dealers are 43 percent of the brand’s U.S. dealer presence), would make it easier for the brand’s dealers to fold into the executive’s controversial “ Project Pinnacle.”

That program, due to kick off on January 1, would see dealers slotted into five tiers based on sales volume, each offering a certain level of customer perks. Compensation from the automaker would be tied to sales performance.

Because dealers would need to invest in their facilities to upgrade their services, the buyout offer gives smaller dealers a chance to avoid the hassle, de Nysschen says. The offers starts at $100,000 and rises to $180,000, depending on the operation. The 400 targeted dealers each sold less than 50 Cadillacs last year.

Ideally, de Nysschen would like every Cadillac dealer in the country to be on board with Project Pinnacle. “Our target is zero,” de Nysschen said. “Our target is to have 100 percent of the Cadillac dealers engaged with the Cadillac business.”

Backlash against the program has grown since de Nysschen introduced it. A California dealer group recently wrote to General Motors CEO Mary Barra in a bid to delay the rollout. The group claimed Project Pinnacle violated state franchise laws, heaped unfair costs onto dealerships, and discriminated against smaller dealers.

It’s hard to see this buyout offer as anything other than a make-the-problem-go-away effort.

[Image: © 2016 Matthew Guy/The Truth About Cars]

Steph Willems
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  • Jeff S Jeff S on Sep 26, 2016

    In many smaller communities the dealers disappeared because they were forced to take a specific number of vehicles and an allocation of types of vehicles that they could not sell in their communities. Many smaller dealerships have for the most part disappeared. At one time the small town near where my grandparents farm was had a Dodge, Ford, Oldsmobile-International dealerships in a county of about 2,000 population. Profitability of a small GM dealership is not that much in today's world of mega dealerships and the internet. Most buyers are looking for the best price.

  • Boomstick0 Boomstick0 on Oct 19, 2016

    I have to drive 50 miles to the nearest Cadillac dealer, and because they didn't particularly do a very good job, I have to drive 90 miles to the next nearest alternative. Too many dealers? Give me a break. Are they trying to kill the brand?

  • W Conrad Sedans have been fine for me, but I were getting a new car, it would be an SUV. Not only because less sedans available, but I can't see around them in my sedan!
  • Slavuta More hatchbacks
  • ED I don't know what GM is thinking.I have a 2020 one nice vehicle.Got rid of Camaro and was going to buy one.Probably won't buy another GM product.Get rid of all the head honchos at GM.This company is a bunch of cheapskates building junk that no one wants.
  • Lostjr Sedans have been made less practical, with low rooflines and steeply raked A pillars. It makes them harder to get in and out of. Probably harder to put a kid in a child seat. Sedans used to be more family oriented.
  • Bob Funny how Oldsmobile was offering a GPS system to help if you were lost, yet GM as a company was very lost. Not really sure that they are not still lost. They make hideous looking trucks, Cadillac is a crappy Chevy pretending to be fancy. To be honest, I would never step in a GM show room now or ever. Boring, cheap ugly and bad resale why bother. I get enough of GM when i rent on trips from airports. I have to say, does anybody at GM ever drive what everyone else drives? Do they ever then look at what crap they put out in style fit and finish? Come on, for real, do they? Cadillac updated slogan should be " sub standard of the 3rd world", or " almost as good as Tata motors". Enough said.