DETROIT -- General Motors is asking exclusive Buick, Pontiac and GMC dealers to swallow some bitter medicine as it cuts overlapping products. But many are taking it with a spoonful of sugar: the hope that GM will help make deals between stand-alone stores.
GM says stand-alone Buick, Pontiac and GMC dealerships will not have a full product line in the future. The automaker wants dealers to combine the three brands into one store.
GM's so-called channel strategy is not new, but the messenger is. Mark LaNeve, GM North America's vice president of vehicle sales, service and marketing, says GM will increase pressure on dealers by cutting overlapping products.
One dealer says stand-alone Pontiac, Buick and GMC dealers shouldn't be surprised. "These stand-alone dealers have known for five years now that eventually they'll have a problem," says Paul Rubin of White Bear Lake Superstore in White Bear Lake, Minn. "Now GM is telling them that they really will have a problem because they won't have product."
Rubin is co-chairman of GM's national dealer council with LaNeve. Rubin is a Pontiac-GMC dealer.
As of Feb. 1, GM had 784 Buick-Pontiac-GMC dealerships, 22 more than at the same time last year. By contrast, GM has 198 stand-alone Buick dealerships, 110 stand-alone Pontiac stores, 168 stand-alone GMC stores and 245 Pontiac-GMC stores.
GM is helping make deals between stand-alone dealerships. To what extent GM will step in financially, though, remains unclear.
GM helped out with one deal in suburban Detroit. Bob Saks Buick-Oldsmobile will sell to Bob Sellers Pontiac-GMC, says Bob Saks of Bob Saks Buick-Oldsmobile. Both are in Farmington Hills, Mich. GM awarded Saks a Buick-Pontiac-GMC franchise in nearby South Lyon, Mich., he says.
"GM gave us the opportunity to build a new dealership," Saks says. "If it wasn't for them, the deal wouldn't have happened."
Meanwhile, dealers for brands that will get more product -- Cadillac, Chevrolet and Saturn -- are happy with the plan.
Jacques Moore of Moore Cadillac-Hummer-Saab-Subaru in Richmond, Va., says one day he'll likely face a problem of overlapping vehicles if Saab's product lineup expands.
"But I understand it," Moore says. "People don't need to be buying Saab instead of Cadillac just because it has a different badge on it."
Bob Goodman of Goodman Automotive Group, which has two Saturn dealerships in Florida, says: "I don't think it will affect us. The commitment to the Saturn brand is there. We've seen what's coming, and there is more on the horizon."
K.C. Crain contributed to this report
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