GM or Reynolds? Dealers must decide now

It was a tough choice. Sandi Pfeffer and Fern Turpin Jr. reached different decisions.

Pfeffer concluded that her dealership, Bob Frahm Chevrolet-Buick-Pontiac, of Albion, Mich., should continue doing business with Reynolds and Reynolds Co., its longtime dealership management system vendor.

Turpin, dealer principal at Turpin Pontiac-Buick-GMC Ltd., of Ottawa, ended his nearly 30-year relationship with Reynolds and stayed with GM's Integrated Dealer Management System program by switching to a GM-endorsed vendor.

They are among 400 dealers who must decide by Thursday, July 31. The dealers were forced to choose after Reynolds sued GM in a contractual dispute, then pulled out of the Integrated Dealer Management System program in February.

"We're all under a crunch to cut our expenses, and the Reynolds program isn't the cheapest one out there by any stretch," Pfeffer, the dealership's controller, says. "But they do offer, I think, the most value, the most significant software and stuff out there."

1 for GM, 1 for Reynolds
For 400 General Motors dealers, itís decision time. Turpin Pontiac-Buick-GMC, of Ottawa, switched to a new information-technology vendor within a GM IT program. Bob Frahm Chevrolet-Buick-Pontiac, of Albion, Mich., stayed with Reynolds and Reynolds as its IT vendor, leaving the GM program. Hereís why.
Why Turpin is switching to a new vendor
• Cuts IT costs nearly in half
• Remains in GMís Integrated Dealer Management System program
• Likes deep integration between Quorum-supplied system and GM
Why Bob Frahm is sticking with Reynolds
• Believes Reynolds has the best dealership software available
• Wants to maintain 20-year relationship with Reynolds
• Can re-evaluate business with Reynolds in 3 years

A GM house

Turpin, whose father opened a Chevrolet dealership in 1954, wanted to remain in the GM Integrated Dealer Management System program. "We've always been true-blue GM, and we've always had Reynolds," Turpin says. "They are expensive, but it's a strong system."

But when Reynolds backed out of the GM program, Turpin was dismayed.

"Being a true believer of General Motors and of what IDMS was bringing to the table for all dealers of all sizes, I had to look at the whole situation," he says. He switched his Pontiac-Buick-GMC and Turpin Saturn-Saab stores to Quorum Information Technologies Inc. "It wasn't out of spite for Reynolds, but it was out of fear for how important is a GM dealer going to be to Reynolds if they had to sue to get out of IDMS."

Turpin was concerned that the integration between his dealership management system and GM's system would suffer. That integration affects the ability to pass data back and forth quickly between dealer and factory systems.

"That was the biggest part that scared me. If they are out of IDMS, what kind of integration points am I going to have? What kind of contact am I going to have with the factory?" Turpin says.

He says he will cut his information technology costs almost in half by switching to a Quorum system. "You've got to look at every penny these days. When I can cut my IT costs in half, it's a considerable amount of money," Turpin says.

The count so far

As of Wednesday, July 23, more than 40 percent of the 400 GM dealers had made a decision. Of those, about 90 percent decided to remain with Reynolds, said Tom Schwartz, a Reynolds spokesman. The GM dealers leaving Reynolds have been primarily smaller, single-point dealers, he said.

Almost half of the 400 dealers have made a decision, Marty Raymond, GM's director of global retail programs, said Thursday, July 24. Of those, 23 percent are staying with the GM program through a new vendor and 77 percent are staying with Reynolds, he said.

"Balancing the pain of change with the desire to keep the benefits of" the GM program, Raymond said, "we thought that we would get north of 20 percent that would switch" to a new vendor.

GM has endorsed Quorum, AutoSoft International Inc., Arkona Inc. and ADP Dealer Services as Integrated Dealer Management System vendors. Dealers like the GM program for its flexibility of month-to-month contracts, the 30 days' notice to cancel the contract, value pricing negotiated by GM and no price increases through 2012.

Dealers who choose to leave Reynolds will have six months to convert to whatever system they choose.

"It wasn't our decision alone because we're in the middle of a buy-sell," Pfeffer says. "We were happy that they did decide to stay with Reynolds."

The Frahm dealership's decision to remain with Reynolds came after extensive research by the dealership and its potential new owners — and some arm-twisting by GM.

"We got a lot of letters and a follow-up phone call from GM, which I have to admit surprised me a little bit," Pfeffer says. "But they always explained our options and that we didn't have to stay with the IDMS program. But they'd love us to remain."

The dealership's nearly 20-year history with Reynolds played into the decision. The Frahm dealership now has a three-year contract with Reynolds, she says, "So if they change their products, we'll be able to re-evaluate that in three years." 

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