General Motors last week made healing the relationship between GM and its dealers a top priority for 2000.
'I'd characterize it as we kissed and made up today,' said Roy Roberts, GM group vice president of North American vehicle sales, service and marketing, following GM's make meeting at the NADA convention.
'Today's meeting has done more to energize the GM franchise dealers of America. You're going to see a big difference in the attitudes of those dealers. We now know we're counted as a partner again,' said outgoing NADA Chairman Jim Willingham, a GM dealer in Long Beach, Calif.
'You are going to see market share increase just because of this meeting today,' Willingham said.
MISTRUST DIES HARD
Despite the optimistic rhetoric and promises made by GM Chairman Jack Smith and other executives, many dealers are finding it hard to shed the mistrust that reached a climax in 1999.
GM's already strained relationship with its dealers deteriorated further last year when GM reorganized its field staff, disbanded local dealer advertising groups and announced plans to own and operate up to 770 dealerships.
'Don't tell me, show me,' said dealer Denny Fitzpatrick, owner of Fitzpatrick Chevrolet-Buick in Concord, Calif., a day before the make meeting. Fitzpatrick was this year's NADA convention chairman.
'We'll see,' said another GM dealer as he left the make meeting.
GM has a history of rocky relationships. In summer of 1998, problems between the company and the UAW cost GM two months of production and $2.5 billion in profits. Then, led by new chief negotiator Gary Cowger, GM achieved labor peace last year with a new four-year contract. Last year, GM's antagonistic relationship with its dealers came to the forefront. Over the years 'it's cost us market share and it's cost us good dealers going to other brands,' Willingham said.
GM made the problem worse by creating GM Retail Holdings last fall to own and operate up to 770 GM dealerships. After a month of dealers' complaints, Smith put an end to the project.
Bob Maguire, a NADA official and GM dealer in Bordentown, N.J., said he and other dealers feared competing directly with GM. 'When I first heard about (GM Retail Holdings), I seriously considered getting out of the business,' he said.
Instead, Maguire increased his involvement in NADA to fight against factory-owned dealerships.
Last week, Smith and Ron Zarrella, president of GM North America, vowed not to operate factory-owned stores. They also said GM would not sell to customers over the Internet without dealer involvement.
'We're going to put the same kind of energy into our dealer relationships that we put into our UAW-GM relationships. We've got to make sure the entire team is solid and we're going in the same direction,' said Roberts, who retires April 1. His successor, Bill Lovejoy, attended the make meeting but did not speak.
Smith 'committed everybody in this corporation to working this relationship,' Roberts said.
Still, other problems remain. Many dealers feel the elimination of dealer ad groups has pulled marketing dollars away from their local markets. Two groups of dealers in Illinois and Indiana have gone as far as suing GM to reinstate the ad groups. Both lawsuits are pending.
In a joint GM-NADA press conference after the make meeting, Willingham said GM has promised to reinstate some local dealer ad groups to give GM input in developing marketing and ad programs.
'We will be able to localize and utilize the massive amounts of money that General Motors and dealers spend and become a lot more effective.' Willingham said.
Roberts nodded in agreement, but did not say how GM would accomplish that.
GM's goals for 2000 are to boost U.S. market share and improve its dealer relationship. 'And those two goals are not mutually exclusive; they come together,' Roberts said.
Frank Ursomarso, president of Union Park Automotive Group in Wilmington, Del., said, 'I think they've turned substantially in their thinking.'