How Jack Smith saved the franchise system
Peter Brown is the associate publisher and editorial director of Automotive News.
In the end, I happened upon the collapse of their aspirations. And I saw GM Chairman Jack Smith at his laid-back best.
Here's the background: On Sept. 27, 1999, Group Vice President Roy Roberts told dealers that GM would buy up to 10 percent of GM's 7,700 U.S. stores. Megadealers, Roberts told dealers, could "diminish brand equity."
Darwin Clark, a nice man and loyal GM lifer, was assigned to run GM Retail Holdings, which would buy the stores.
If GM was freaked out by mega-dealers, the National Automobile Dealers Association was in a panic over GM.
At an emergency meeting on Oct. 13, NADA Chairman Jim Willingham met with Jack Smith. Some GM executives argued that since GM would hire retailers to manage the stores, they weren't really factory stores. The project continued.
Two weeks later, I interviewed Jack Smith. I asked about GM Retail Holdings.
"Well, we're not going to have factory stores," Smith said.
"You're just playing semantics," I responded. "Just because a 'retailer' runs it -"
No, Smith said. We're not going to buy them; we're not going to run them. The plan is dead.
The avuncular Jack Smith didn't want to hang his executives out to dry.
"I think they were caught up in the front part of it, that we might need to own the store to take advantage of the opportunity," Smith said. "But what became very unclear was the endgame of how this thing operated."
In a huge and bureaucratic GM, you rarely see where the buck stops. But by himself, Jack Smith killed the plan to make GM its own biggest dealer.
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