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Mr. Roscoe,
After years of experiencing GM's "program of the month," I wanted
to focus attention on the fact that General Motors will not stop until they
have eliminated their dealers. Those who don't believe this, just look at
the time and money GM has spent to implement their "master plan."
Once in effect, this plan will more than likely have GM as a retailer, the
dealer as a delivery point and the consumer paying more than ever for a vehicle.
Just look at the pattern
STEP 1 - PROJECT 2000: Channel all dealers properly. Unnecessary dealers were to be bought out by GM and eliminated. Costs too much. GM was facing too many legal battles and doesn't have enough money to see the program through. So, how do they get their hands on these stores that are worth so much?
STEP 2 - CXD (Custom Express Delivery): GM makes lots of Jimmys, Blazers and Cadillacs. The dealers can get them quick and deliver them to their customers. GM says, "What a wonderful marketing idea." The problem was that the dealers didn't take most of them because they were not properly equipped. Furthermore, the dealers couldn't get custom orders placed because of constraint problems. GM must find a way to stuff expensive product down the throats of dealers.
STEP 3 - VOMs (Vehicle Order Management aka VOMit by the dealers): GM totally changes the order and allocation process by introducing a single software system to order new cars. They got rid of a bunch of their own employees and placed the work in the hands of dealer employees. GM now had dealers believing all kinds of great things were to come from this new system (more "hot" models, inside info regarding incentives for ordering, quicker production, blah, blah, blah). What it really is: a way to sell cars for 90 days, tell them what we want 90 days from now. We get allocation and request orders. Now the snag: If you can't get what you want, you
have to take it the way it is or turn down the unit and another dealer gets it. We used to tell the factory what we wanted, now they tell us what we're going to sell. That's not the worst of it. I'm sure buried in the lines of the VOMs software is a consumer-friendly Internet ordering program. So now we have a new way to communicate with the end user (consumer).
STEP 4 - NO MORE AD ASSOCIATIONS: GM thought the dealers were having too much fun spending THEIR (the dealers') money. Additionally, how dare the dealers get together once a month and put together local ads and talk about the factory? The saying is DIVIDE and CONQUER. Disband the associations so the dealers can't organize against GM. They got rid of tag lines on TV ads, who needs the dealer now?
STEP 5 - GMRH (General Motors Retail Holdings): Mr. Smith says he never heard of it. What? Doesn't he ever talk to Roy Roberts? GM wants to now buy only a few "key stores" on a case-by-case basis. They think they can play the Ford Auto Collection game and WIN. WRONG. You need "car guys," not bean counters and weak field staff selling cars. But I'm sure they will be trying to change franchise laws so they can acquire some stores. If they try hard enough, maybe they will make it cheap on themselves by lowering the value of ALL dealerships. God only knows what they'll do to accomplish that. But with that in mind
STEP 6 - The INTERNET: Sell cars directly to consumers. Get customers to believe that the dealer is making the price 25% higher and you'll get the states to ease up on those franchise laws. GM will begin competing with its own dealers. Hey, GM can get more hot product to its GMRH stores and sell it cheaperthat ought to take out a few more dealers. Does this have the makings of a monopoly? Watch how fast the prices go up. Who loses in the end? The consumer.
What else can I say except that the dealers had better reorganize and have one main goal: SAVE YOURSELVES!! There's still time to keep everything you've worked for all your life. If you're not part of the solution, you're part of the problem.
Name withheld upon request
Dear Jim,
I would not expect you to remember me, but I have had occasion
to dine with you one night many years ago at a 20 Group meeting and since
have attended several seminars on F&I and Sales Management. I have been
an avid reader of your articles in DEALER magazine and appreciate your candor
on the subjects discussed. Isn't it interesting that GM, over the last 20
years, has continually thrown up roadblocks for its dealer body (which they
have an obvious disdain for) and the dealers adapt to its new challenges with
record profits.
The reason for this email is that we have recruited a new individual for our F&I department. This person is absolutely green to the automobile business. I have known this person for several years and I truly believe he possesses the qualities that are right for this company and this position. My dilemma? He needs training. Your seminars have been fantastic, yet do you feel that they would be too advanced for a green pea? What would you do in this situation? I would value your recommendations regarding this. Please respond by e-mail, if possible. Keep up the writing and I'll keep reading.
Sincerely,
Ben Heintz
Heintz Pontiac Cadillac Toyota
Mankato, MN
