Rick Wagoner, CEO of General Motors, says he and other top GM executives are spending more time with dealers to build a better relationship. He was interviewed at the convention Sunday by Special Correspondent Michelle Krebs.
January sales were strong — stronger than we expected for us and stronger than we expected for the industry. We're still looking at 2001 coming in between 16 million and 16.5 million. That looked a little high a few months ago, and looks a little low at this moment. After coming off two record years, it's not bad at all. It'll be the third-best year the industry has ever had in the U.S.
What will the Federal Reserve's cutting of interest rates do for the industry?
The Fed rate cuts are big. Obviously they will help. The one in January we didn't expect, and (it) boosted confidence. The most recent one was more expected. Obviously we'd like to see more as time goes on.
How would you assess GM's relations with its dealers?
We've been focusing on improving dealer relations. I want to recognize (that) since last year, when Jack Smith talked about making a commitment to working that side, there's been a lot of effort from the top. In particular I'd like to recognize Bill Lovejoy and his team, John Middlebrook, Michael Grimaldi and Darwin Clark. These are people who are liked by the dealers, respected by them, know the business and understand the dealer issues. The team has done a real good job of building a better tone in the relationship.
What is an example of how you have done that?
There's a lot more broad-based communication. As an example, we used to hold our broad-based national dealer council meeting once a year. Now we do it monthly. By the way, that's done by dealers on their own time. That's a big commitment on their part, and we appreciate that. We've got a systematic integration of divisional and regional advisory dealer councils as well. We have more input from more dealers than we've ever had. Besides the formal approach, Jack, Ron (Zarrella) and I are spending more time with our dealers. I went to NADA headquarters on the Olds situation, and they said it was the first time a CEO had been there. They picked me up in a brand X van and I told them I wasn't coming back until they had a Chevy van.
A few years ago you launched a channeling strategy. With Olds gone, is that strategy scrapped, or do you redo it?
It did a lot for us. We paired up brands that made sense where it wasn't possible to have a single-line store. As a result, we only have 63 stand-alone Oldsmobile stores. It also helps us to address product planning in the future by not forcing us to build product across all brands just for dealer viability. We've made a lot of progress, but it will take a long time to execute.
What do you hope to achieve in the transition of eliminating Oldsmobile dealers?
There are some legal issues at play. We've offered compensation in excess of what is required in the franchise agreement and state legislative requirements. The fact is we want to do it in a way that's fair. We recognize many Olds dealers are selling other GM products, so it helps the relationship to work this well. We have to do what's fair. We've had good conversations with dealer organizations and dealers. There are lots of rumors we hope to sort out here, and there's more work to do to execute the plan.