Statement Regarding the Creation of General Motors Retail Holdings
29 September 1999
Statement Regarding the Creation of General Motors Retail Holdings; James A. Willingham, Chairman, National Automobile Dealers Association
MCLEAN, Va., Sept. 28 -- The following statement was issued
today by James A. Willingham, Chairman, National Automobile Dealers
Association:
We have worked very had this year to establish meaningful communication
with General Motors and increase dealer input to their policies and
procedures. We are, therefore, very disappointed by GM's announcement today of
the formation of General Motors Retail Holdings. The announcement was made
without any consultation with or input from GM dealers or NADA.
* Franchised dealers have been required to make substantial financial
investments and meet stringent manufacturer requirements, from the
color of paint on their walls to the equipment they must buy to
service vehicles. The manufacturers can change the ground rules at
any time and with no notice, as evidenced by this announcement.
* The idea that GM will now compete at the retail level reaffirms the
need for strong state franchise laws to protect dealers and
consumers.
* More than 80 percent of GM's franchised dealerships are small
businesses. To now be in competition with the manufacturer and
distributor of their product, which also happens to be the largest
corporation in the world, presents a daunting competitive obstacle
that dealers could not have foreseen.
* Manufacturer retail outlets, rather than independent,
entrepreneurial retailers, selling directly to consumers, along with
the growing consolidation of manufacturers, can only result in a
significant reduction of competition. This will ultimately reduce
consumers' opportunity for choice in the marketplace.
We call on GM to rethink this flawed initiative and the process that led
to it.