Jim Willingham, chairman of the National Automobile Dealers Association, is strongly opposed to General Motors' plan to become a huge retailer. He owns Boulevard Automotive Group (Buick-Pontiac-GMC) in Long Beach, Calif., about eight miles from a GM-owned store. He spoke to Staff Reporter Mark Rechtin at the Tuesday, Oct. 5, meeting of the Motor Press Guild in Los Angeles. What follows are excerpts of his comments.
On why NADA is taking a stand with GM Retail Holdings Corp., when it didn't with Ford Auto Collection:
GM Retail Holdings Corp. is unlike Ford's model because it will not include the dealer as a partner. They will hire their own retail management. This squarely threatens the franchise system as we know it. However, they say they're going to run it, supposedly with the same franchise agreement.
There are things we dealers worry about, like insider information, inventory allocations and processing of warranty claims.
The fear is maldistribution. When the Suburban is so hot and it's our best-grossing vehicle, if the GM store gets 25 and I only get 10, he lays me away. And because of the turn-and-earn system, he keeps me laid away. I give GM my financial statements every month, and that means the factory store eight miles away in Cerritos is going to know what I'm making on every vehicle and what I'm paying my technicians.
We dealers can't strike, we can't boycott, we can't refuse to sell certain cars. So all we can do is go to the statehouse and make sure the manufacturer can't put a dealership in competition with its retail franchises.
If GM has 7,700 dealers, and it buys 770 of them in 130 markets, they'll be the ones setting the price on the vehicle you want. It can be noncompetitive real quick.
It shows GM doesn't have respect for the dealer network. It's easy for GM to be arrogant when they had 56 percent of the market, but it's hard to understand that when it's only 29.6 percent.
On GM's motivation to get into retailing:
The manufacturers are seeing dealers making money and want some of that downstream income. But I don't know of a single factory store that has made money. Someone can't just move out from Detroit to the local community and learn all the nuances.
On meetings with GM officials on the issue:
We have a meeting set for Oct. 13 in Detroit with (Chairman) Jack Smith. I've also met with Darwin Clark (the CEO of GM Retail Holdings) several times and spoke with him on the phone for an extended period of time. Darwin has won the dealers' trust and has kept his word for 25 years, so I think we can work on this.
On GM hiring lobbyists at the state level, perhaps in an effort to weaken franchise laws:
NADA has never gone to the state level. That's up to groups like the California Motor Car Dealers Association. We offer those groups assistance and provide a model of the best franchise laws to protect the dealer. Our job is at the federal level. But if GM would embark on such a direction, we would have to rethink our strategy and help in the statehouses.