Facility Upgrade Story on Automotive News

[Txflyer]

Anyone seen the facility upgrades GM is going to be pushing on dealers? Very descriptive story over on Automotive News.

Holy Cow!

[XDCX]

I just read the article and concur with your Holy Cow.... Especially the part where the dealer has to agree to provide his/her customer lists to GM so they can "coordinate" marketing efforts. The fact that the dealer may have to wait 5 - 10 years for payment also raised a concern.

While I don't like the trend, my bet is this is the wave of the future. OEMs will want more control over their dealers and will use programs like "Essential Brand Elements" as both a carrot and a stick.

My other bet is the Internet will continue to put pressure on New Car Gross Profits and dealers may be forced to participate in programs like EBE because they cannot exist in a market with two-tier pricing.

On a final note, it was sobering to read that Cadillac will be down to just 500 dealers. It sounds like GM is expecting a lot from the 500 NEWCO Cadillac stores that survived. It will be interesting to watch what happens.

[Txflyer]

We had just built a completely new facility for GM back in 1996 - and were one of the stores who got cut. I think it was probably a blessing in disguise. The new dealer agreements that all the GM dealers were forced to sign were outrageously one-sided.