Dealer praises GMAC `grading'
I wrote this letter to James Willingham, chairman of the National Automobile Dealers Association:
It has been brought to my attention that NADA has received negative comments about General Motors Acceptance Corp.'s delineation of dealers into platinum, gold and silver categories.
As the holder of Cadillac and Ford franchises, I wish to express my complete satisfaction with the program. I believe the majority of GM dealers feel as I do.
My only criticism of the program is that it doesn't go far enough. GMAC has every right to extend to its loyal dealers benefits that less loyal dealers do not enjoy.
Ford Motor Credit has a similar plan - without the 'metal designations' - that goes even further in rewarding loyal dealers with perks that are not available to dealers who cherry-pick their services.
My dealership has benefited from the lease portfolios and training provided by our platinum designation. I hope the program not only continues but is enhanced.
White Plains, N.Y.
Mullane lists Ford's `failings'
I congratulate Keith Crain on his June 28 column,'Is something wrong?' It should be must reading for dealers and manufacturers alike. To paraphrase Crain, why destroy a system that has worked well and produced tremendous profits over many years?
In retrospect, the seeds of destruction were planted 20 years ago. Ford Motor Co. has had a deep-rooted dealer bias for many years. Over the years, Ford has attempted to bypass the franchise system in many ways - diagnostic centers and pre-delivery centers, to name but two.
In addition, for many years, Ford has attempted to micromanage our businesses by infiltrating every department of our dealerships. In the new-vehicle department, it has cut discounts and has set new-vehicle prices in advertising. In the service department, it has cut warranty labor time and warranty parts prices, set service prices in advertising and reduced incentives and return privileges on parts.
Hypocritically, those strong-arm tactics come from a company that has probably never made a dime operating a company store.
Forty-six years ago, when I signed the Ford sales and service agreement, I agreed in good faith to make 'important investments or commitments in retail sales and service facilities and equipment.' That was my end of the bargain, and I have done my best to honor that commitment. Nowhere in the agreement was I warned that years later, I would be forced to compete with my own manufacturer. What happened to Ford's good faith?
Unfortunately, manufacturers do not always behave honorably. It is past time that Ford upheld its end of the bargain, rather than treating its dealer body like a subcontractor.
Without proper focus in Ford's management decisions, the relationship is doomed. All parties involved - dealers, manufacturers and consumers - will suffer the consequences of its flawed strategy.
In Crain's words, 'it might be a good idea to spend as much time, effort and money on the existing system. It's worked pretty well for a century.'
EDWIN J. MULLANE
Ford Dealers Alliance
For small dealer, it's `turn and burn'
I want to comment on two letters in your July 12 issue. One was from an auto consultant whom I consider very unknowledgeable. He doesn't have a clue about 'turn and earn allocations.' The other was from a dealer in Houston, Pa., who is right on the money.
We have General Motors and DaimlerChrysler franchises. As a small dealer, I can order 'hot' vehicles for my customers on a limited basis from GM. As for Corvette, I can get maybe one or two for the entire model year, no matter how many customers I have for them.
Some dealers have 10 grounded stock and are still getting more for stock. I have never been able to figure out why 'sold' orders do not take precedence over orders for stock.
In the past, GM would track a 'sold order' vehicle. If you did not deliver to that customer, you were penalized.
With Chrysler, order it today, and your customer is generally driving it 30 days later.
As for 'turn and earn,' it should be called 'turn and burn.' Small dealers rarely get hot vehicles; they're jammed with cold merchandise.
The consultant should buy a dealership. He'll change his tune. He would also agree that GM's Vehicle Order Management System does not work.
Pavlik Motor Cars Inc.
Spend it on Chevy, not on Saturn
With 22 years' experience as a General Motors employee and 18 years as a Chevrolet-Oldsmobile dealer, I cannot understand why GM continues to throw money away, like the $1.2 billion for new Saturn products.
That money would have been better spent on improving the Chevrolet car line, now that the introduction of the new Cavalier has been delayed.
Improving the Chevrolet car line would do more to increase market share than spending $1.2 billion on Saturn.
GM should focus its attention and financial resources on products that will improve market share and stock prices.
GM should have bought Toyota to capture the import market. If you ask the dealers and the financial analysts, I know where they would have spent the money.