The potential for fear and loathing is there in General Motors' proposed 10 percent ownership of the retail computer services giant Reynolds and Reynolds Co.
But reaction to the planned tie-up has been subdued. In an era of industry-shaking global mergers and partnerships between rivals, GM's dealer competitors appear to be inured to the latest deal.
'It was a so-what,' says Jerry Reynolds, owner of Prestige Ford in Garland, Texas, a Reynolds and Reynolds customer and chairman of the Ford Division National Dealer Council. 'As long as GM has that very minority share of the company, I don't mind.'
Reynolds and Reynolds provides dealer-system management services to about 22,000 U.S. auto retailers. About 8,000 of them are GM dealers.
On May 16, the company announced it would become GM's preferred provider of dealer management systems. Reynolds and Reynolds also will design, implement and manage GM's e-commerce retail technology. In exchange, GM will own 10 percent of the Dayton, Ohio, services provider.
Reynolds' relationship with its customers gives it access to confidential financial data from dealers across the industry. That could give pause to non-GM dealers.
'My first reaction to the news was one of concern,' said Joe O'Brien, owner of Parkway Mitsubishi in Normal, Ill. 'I thought, `Is all this information going to stay proprietary?' '
O'Brien has 23 franchises, including Mitsubishi and Dodge in Illinois and Florida. None of them are GM. All of them rely on Reynolds and Reynolds.
'I had some questions,' says O'Brien, past chairman of the American International Automobile Dealers Association. 'Is Reynolds' focus now going to be just what GM wants it to be? Are technology providers to Reynolds going to continue supplying them with current technology, or is GM going to determine what the technology needs are?
'But then my reaction was, `Maybe this is a step in the right direction.' These e-commerce issues are still so hard to get our hands around. The industry really needs to do more thinking outside the box.'
John Johnson, an independent Ford dealer in Brevard, N.C., observed that the borders between industry rivals already have blurred beyond recognition. 'Non-GM dealers use (GM-owned) MIC insurance for their garage liability coverage. Non-Chrysler dealers use Chrysler insurance. What's the difference?' he asks.
'I doubt seriously that GM is going to do anything to burn down the relationships R and R has built over the years,' Johnson said.
Kelly Kavanaugh, Reynolds and Reynolds' vice president and partnership executive for General Motors, said the link with GM is not meant to exclude its other customers. 'What we're about to create for GM will be proprietary, but we will do the same thing for Ford or any other automaker,' she says. 'Would it involve the same type of financial arrangement as this? Maybe, maybe not.'
Dave Thomas, a Dodge-Chrysler-Plymouth-Jeep-Toyota-Honda-Mazda-Lincoln-Mercury dealer from The Dalles, Ore., called the GM-Reynolds deal a good move. 'Reynolds might step on a few toes doing this. But GM needs help, and Reynolds wants to move further into e-commerce,' said Thomas, who has an independent automotive e-commerce business. 'This will give Reynolds a chance to do what it wants.'