Ed Levy has spent his entire career in automotive retailing.
As a child growing up in Detroit, he cut doors and windows in cardboard boxes, called it his dealership, and drove his toy cars and trucks into it.
He bought his first Volkswagen from lawn-cutting money at age 16, and the following year the dealer from whom he had purchased the car offered him a job. He worked in various dealership jobs, eventually becoming a partner with Bill Golling in Golling Pontiac-GMC in Lake Orion, Mich., and Golling Chrysler-Jeep in Bloomfield Hills, Mich. Levy runs the Lake Orion store.
Levy is a member of the Pontiac-GMC dealer council, and also is the head of General Motors' North Central regional council.
He was interviewed late last year by Special Correspondent Michelle Krebs about the issues facing dealers. An edited version of that interview follows.
What do you think the prospects for 2000 will be for the industry?
It will be a pretty good year, but not as good as 1999, according to most forecasters. I believe the first half will be quieter than a lot of people think, but will pick up in spring.
The general economic indicators still are good. In addition, leasing has created a built-in replacement market.
What is the hot product for Pontiac-GMC?
We're very fortunate that the bulk of products at Pontiac and GMC are hot. The Grand Prix, Grand Am and Montana are doing well. The new Bonneville is just getting awareness out there and is off to a nice start. The Aztek arrives in late summer, which is the right product at the right time.
At GMC, the Sierra, Sonoma and Jimmy are doing well.
The Yukon and Yukon XL are greatly anticipated by customers. We have a lot of orders and customers are anxious to see and drive them. They are already home runs.
What is the weak link in the line?
We could do better with commercial products. This is a transition year for heavy-duty trucks. Hopefully, we'll get help on availability.
The Pontiac Sunfire is weak, but it's not the product - it's the weak small-car segment.
Isn't the Safari van weak?
Safari had capacity constraints because GM took vehicles out of the schedule. They may have overdone it. We're selling out.
What are the hot products and weak ones in General Motors' North Central region?
About the same. We don't see a lot of regional difference in product, except that two-wheel drive sells better in the South and four-wheel drive in the North.
Explain the various councils GM now has.
When GM reorganized last January, we developed a divisional council for each of its five divisions. That council deals with issues specific to that franchise. Issues cover product, marketing, branding, whatever is specific to that product.
Concurrently, we organized into five regions. The regional councils deal with common processes used by all GM dealers regardless of franchise, things like warranty and distribution.
How did the original plan work?
We had a concern that we had no way for divisional councils and regional councils to communicate with each other, nor did we have a way for regional councils from the five regions to interface.
The setup depended on GM people ... on the regional councils carrying forward issues to top management.
We had no doubts that they did that, but it's not the same as hearing it from the dealers.
Have these glitches been solved?
GM saw the situation the same way the dealers did and recently formed a new national council. Our first meeting was in Detroit in December.
That council is composed of five dealer heads of the divisional councils and the five dealers who co-chair the regional councils with GM people.
Small, minority and commercial dealers are also represented, and we have a dealer representative from the National Automobile Dealers Association on the council.
What is your role?
I am a member of Pontiac-GMC divisional council and the dealer chairperson of the North Central regional council. I spend the bulk of my efforts working on the regional council.
Is the new structure effective?
It is very effective as far as dealer councils go. The problem we used to have with the old dealer councils is that ideas and issues didn't always bubble up from the dealer ranks. Now we have more of that and we rank those issues. We think we are more representative of the dealers today than ever before.
What are the dealer council's top concerns?
Distribution is our top concern, and it is a complex issue. It takes the form of lack of capacity for certain products.
For example, three-quarter-ton pickups run at about 20 percent of pickup sales. However, production constraints limit us to 12 percent.
Cadillac dealers need more DeVilles.
We lack the LS version on the Impala.
Buick LeSabre models with chrome are in short supply.
Dealers are frustrated that GM is not able to build the cars and trucks buyers want in the quantities we need.
Is it the Vehicle Order Management System that is the problem?
VOMS is a major problem. It is arduous and is not market-responsive.
It forces a dealer to commit to a quantity of vehicles two months in advance.
But not all of the problems are with VOMS. We've had tons of logistical problems principally due to rail.
At one point there were more Cadillac DeVilles sitting in rail yards waiting to be shipped than were in the hands of dealers.
What are other issues facing your council?
Regional marketing is an issue. GM did away with the dealer marketing groups and the region now places ads in local markets.
The dealer perception is that there is not as much advertising as there used to be especially on TV, and the advertising is more national in nature. The ads are not as much a call to action as they were under the old dealer marketing groups.
A lot of dealers are comfortable with the co-op program and don't want a total return to the old ad groups, but they want more involvement with the advertising in their market.
General Motors' franchises ended up at the bottom of the National Automobile Dealers Association dealer satisfaction survey. Is that a concern?
We have a firm grip on the bottom six spots. Dealer satisfaction began descending in the early 1990s at a gradual pace.
It got better and was coming back, then started trending down again.
Early in 1999 it took a free fall. Much of that was due to the massive changes GM was making, the announcement about General Motors Retail Holdings and GM's e-commerce plans.
How important is Internet selling to Pontiac-GMC dealers?
The Internet is a new technology that, to me, is no different than the telephone was 100 years ago. It is a major communications device.
We have an e-commerce council committee studying it.
We're trying to determine what the customer will want in five to 10 to 15 years in relation to the Internet.
We know now car shoppers get their basic information from the Internet, but, as of today, they have not demonstrated that they want to do the entire transaction over the Internet.
