Lovejoy builds dealer trust

Late on a busy Thursday, General Motors' Bill Lovejoy plopped down at his computer and scrolled through e-mails from dealers.

In recent days, Lovejoy, the point man in GM's efforts to improve dealer relations, had used e-mail to soothe a dealer angry about a GM-levied fee. He suggested changes to another dealer's proposal for a trade-in program for older cars. And Lovejoy moved swiftly when a Florida dealer asked for low-interest car loans.

"We put in a zero-percent rate on Cavaliers in his market two weeks later," he said. "You do that and dealers say, 'My God, they are responsive.' "

Being responsive has been Lovejoy's strong suit since he was promoted 18 months ago to group vice president for vehicle sales, service and marketing. Arriving when GM's relations with its dealers verged on open warfare, Lovejoy has restored a degree of trust.

Some of the improvement has been driven by pragmatic decisions. Lovejoy's team, for instance, has improved the much-criticized Vehicle Order Management System. Dealer councils have greater influence also.

But Lovejoy's style has played a large role. The tall, silver-haired 61-year-old retains a trace of his native Brooklyn accent - and a straight-talking, down-to-earth manner that many dealers find refreshing. Lovejoy can go, as he did at a recent press event, from scrappy critique of possible fuel economy regulations to lunchtime table talk about his fondness for the TV sitcom "Dharma and Greg."

'All kinds of upside'

Wisconsin dealer John Bergstrom notes that, with GM's problems, Lovejoy "had all kinds of upside when he came in.

"I can't tell you what a difference he's made ... If I call Bill, he would call me back or e-mail me within 24 hours. That is so different."

Lovejoy says accessibility is part of it - he gives his e-mail address out at dealer meetings, for instance - but adds that he genuinely respects the dealers' role.

"I've had (GM Chairman) Jack Smith say to me, 'Bill, I've heard you tell dealers some tough things. How come they'll take it from you and they don't get angry?' " Lovejoy said. "I think the No. 1 thing is that I like dealers. You gotta like them. They just know whether you like them or you don't like them and whether you think they're important."

Dealers also appreciate efforts to build their profits, he says.

"We have put out a metric to the organization telling them that we are going to measure our own people based on how well the dealers do," Lovejoy said. "We review dealer profitability on a very consistent basis, and we report out on dealer profitability to the North American Strategy Board."

After seeming eager to circumvent dealers by exploring such options as online sales, GM now is committed to working in tandem with dealers, he says. The overriding principle, Lovejoy says, is "It never works in a business relationship if only one side is advantaged."

Stressful changes

Lovejoy took his post after GM's dealer relations crashed in 1999. That summer, the company revealed a plan, called GM Retail Holdings, to buy and operate 10 percent of its dealerships.

The proposal infuriated dealers, in part because it followed a series of wrenching changes. GM dissolved its divisional field organizations in favor of a single unit handling all divisions. And it removed dealer control of local advertising funds.

The moves were part of a larger effort at "convergence," in GM-speak, which stripped traditional GM divisions of their autonomy in engineering, design and manufacturing. Though the moves set the stage for efficiency gains that benefit GM today, they alarmed dealers. So did efforts to cut the dealer body and the company's initial forays into Internet vehicle marketing.

Ron Zarrella, who was vice president for sales, service and marketing for much of that time, became the focus of many dealers' anger. Now president of GM North America, Zarrella has said he was not anti-dealer but had to push for difficult changes that lowered GM's costs.

The 2000 National Automobile Dealers Association dealer satisfaction ranking marked the low point. With the exception of Saturn, GM divisions clustered at the bottom of the list.

GM has moved up since then, although the progress is relative. This year, GM divisions other than Oldsmobile outranked Chrysler group and Ford Motor Co. brands in the NADA survey. But they trailed imports and remained below the industry average. Saturn, again the exception, ranked third overall.

'Beginning steps'

"Does that mean we've done a terrific job?" Lovejoy said. "No, I'm not that naive. We've done a good job. We've made the beginning steps."

Lovejoy notes that competitors' controversies, such as Ford's Blue Oval program to certify dealers, helped GM's ranking. Many GM dealers remain skeptical, he said: "It's like any relationship that gets damaged. You don't just turn it around overnight. A lot of dealers are watching to see everything that we do."

Still, some dealers say things are improving.

"We went through a time period there where the communication was really lacking," said Glenn Ritchey, president of the John Hall Automotive Group in Daytona Beach, Fla., and co-chair of the GM National Dealer Council. "The process right now is the best that I've known it to be in the 12 years that I've been involved."

Jim Willingham, a Long Beach, Calif., dealer who was chairman of NADA when the GM Retail Holdings controversy erupted, says the difference today is "night and day."

By mid-1999, dealers no longer believed that GM executives were being honest with them or that they cared about dealers' concerns, Willingham says. Many dealers still bear a grudge against Zarrella for what they perceived as anti-dealer attitude, he says.

"If he'd go away, the dealer attitude survey would change dramatically - and he's been told that," Willingham said.

Repo man

The situation, in retrospect, seems tailor-made for Lovejoy. He got his start in the auto business far from the executive suite - repossessing cars for General Motors Acceptance Corp. in New York City. Though he's approachable and open, Lovejoy has a tough streak, dealers say.

"If a dealer is wrong, and frequently a dealer is, he has no problem saying, 'You're out of step here,'" said Bergstrom, owner of Bergstrom Automotive in Neenah, Wis.

That trait goes back to Lovejoy's youth in a tough neighborhood where, he recalls, most of his classmates became cops, firefighters or criminals. Lovejoy got a bank-teller job after high school but quit for GMAC in 1962 when the bank wouldn't put him in a management program.

"I was a bit of a hard ass," he recalled. "I said, 'Ninety days, man. If you don't put me in training in 90 days, I'll quit.' On the 90th day, I quit."

Lovejoy worked his way through college, getting a bachelor's degree and an MBA while at GMAC. He became president of GMAC in 1990 but took a hit in 1992 after the company was swindled out of $436 million by New York dealer John McNamara.

Although there was no suggestion of impropriety by Lovejoy, he was removed from the GMAC presidency and placed on special assignment as part of a broad disciplinary action. A month later, he was named head of GM's Service Parts Operations.

Today, Lovejoy says his rapport with dealers results from his long tenure at GMAC.

"The only place GMAC gets its business is from the car dealers," Lovejoy said. "You don't make direct loans, or go out to a mall and have a fair. You do it through the dealer."

You can reach Dave Guilford at dguilford@crain.com

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