When Jim Yark, an Oldsmobile dealer in Toledo, Ohio, got the news that General Motors was killing his brand, he immediately stopped his factory order for 140 new vehicles.
It wasn't what GM wanted from Oldsmobile dealers. GM wants to sustain the brand through a two- to three-year phaseout.
But GM faces a huge challenge in placating dealers who think the marketplace will dump Oldsmobile faster than GM expects. Last week the automaker offered Olds retailers a handsome package of incentives to try to keep the flame burning long enough for GM to figure out how to shut down 2,800 franchises.
It worked with Yark: He reinstated his factory order, giving himself a three-month supply. But that, he says, is as far as he plans to go.
'You can't order cars unless you know what's ahead,' said Yark, who also operates Nissan, Jeep, Mitsubishi, Subaru, BMW and Porsche franchises. 'I don't know, and neither does GM. There is no business plan that can take you three years out.'
Yark's own plan: cut back his Oldsmobile business to the minimum level required by his dealer-franchise agreement.
'It just takes too much energy to do this,' Yark said. 'It's hard enough to sell these cars under normal circumstances. But what are we going to tell customers now? What about the Buick dealer down the street we're competing against? When a customer says he's also looking at an Oldsmobile, don't you think that dealer is going to say, `You know, Oldsmobile won't be around this time next year. Who's going to service that car?'
'No,' Yark said, 'this is it for me. I'm getting the hell out of it.'
Other dealers are canceling new orders, or at least hesitating. Others are filled with questions: When will their employees begin jumping ship? When will their banks begin to cool to Oldsmobile business? And when will their retail competitors start using Oldsmobile's fate as a sales pitch for Olds consumers?
'I give it six months,' says Reed Trickett, who runs his family's 30-year-old Trickett Oldsmobile in Madison, Tenn. 'GM effectively killed it when they made the announcement. How are we going to continue promoting this product to customers for two to three more years?'
Like Yark, Trickett immediately cancelled his orders for 16 new Oldsmobiles. At Faulkner Oldsmobile in Bethlehem, Pa., General Manager Dave Sterk stopped his orders, too.
'We need to watch the market for a little while,' Sterk said. 'Are customers really going to keep coming? I don't know the answer to that. And before I make a dollar commitment to GM's plan, I need some assurance.'
GM acknowledged the problem last week when it revealed details of new incentives to move Oldsmobile products. Among the plans:
GM will pay $400 cash directly to each salesperson for every Oldsmobile he or she sells.
GM will pay another $100 to the dealership sales manager for every vehicle the store sells. So if a store's 10 salespeople sell 100 cars next month, their sales manager gets a $10,000 check from GM.
Current Oldsmobile owners going back to the 1996 model year will receive vouchers for $1,500 off of any Oldsmobile vehicle, on top of existing GM incentives.
Each dealership will receive 60 days of interest-free floorplanning for any Oldsmobiles they order through April.
The Oldsmobile vehicle maintenance agreement increases to five years or 60,000 miles, compared with the previous standard of three years or 36,000 miles.
GM will repurchase unsold dealer inventory from the 2000 and 2001 model years. The factory has not clarified how that offer will work.
It still is not clear what the consumer reaction to GM's announcement will be. The Christmas period traditionally offers auto retailers little business, so many dealers say they cannot tell whether sales were affected by the news. Richard Bayliss, general manager of his family's Bayliss Oldsmobile in Reading, Pa., says he has already seen customers coming in under the assumption that the store would be selling distressed merchandise.
He doubts GM will keep up generous incentives for two to three years.
'They can't afford to do that,' he said. 'You've got to think that they're really just trying to keep dealers going until (dealers) can make other arrangements.'
Geoffrey Pohanka, president of Pohanka Automotive Group of Marlow Heights, Md., which has Oldsmobile franchises at two of its seven locations, sees sad irony in GM efforts to promote the division's cars and trucks after announcing the brand's demise.
'I think they think (Oldsmobile is) going a lot longer than maybe we do, and the consumer (does),' Pohanka said. 'Certainly the customer will react probably a lot more violently to this, thinking it's ending right now.'
GM spokesman Terry Sullivan said GM wants time to move many Olds dealers into new franchises.
'We know there are a number of really good dealers out there in Oldsmobile stores,' Sullivan said. 'They want to continue selling, and we want them to continue with General Motors.
'The task for us is to find ways to keep them with us,' Sullivan said. 'It could be that there is another dealer across town - maybe a Buick dealer - who is not a strong dealer, and who is willing to sell out. So maybe the Oldsmobile dealer takes over the Buick franchise.'
Ron Zarrella, president of GM North America, acknowledged last week that Oldsmobile's shutdown could come sooner than the three years estimated by the company. 'As the models become economically nonviable, we'll take them out of production,' he said.
The question is how much time the marketplace will give GM to sort things out.
The answer will start coming in the next few weeks as consumers size up the deals coming from Oldsmobile dealerships.
Staff Reporter Harry Stoffer contributed to this report.