Stung by the anticipated loss of 438 Saturn dealership customers, ADP Dealer Services executives are complaining that General Motors used Saturn dealers as a bargaining chip to negotiate price concessions from Reynolds and Reynolds Co.
GM said in December that its Saturn dealerships must switch to a Reynolds system beginning in August 2007. Saturn dealers now use ADP.
"Saturn is the pawn, Saturn is the carrot, the only thing GM can put on the table to (persuade) any dealer management system provider to play the game that they want to play," says Linda Judd, vice president of operations at Automotive Retail Group, an ADP division.
ADP gained the Saturn dealers as customers when it purchased Automotive Retail Group from EDS Corp. in March 2004.
ADP and Reynolds are the U.S. market leaders for dealership computer systems, with a combined share of 80 percent of the U.S. stores.
"For Reynolds, they are potentially taking a price reduction, so you had to give them some guaranteed volume - some quantity of dealers," says Matt Parsons, vice president of sales and marketing at Automotive Retail Group.
"If they (GM) hadn't given them Saturn, I don't know that Reynolds would have played. I don't know that a Reynolds or an ADP would have ever really stayed at the table very long."
Reynolds won't say how much it stands to gain from the additional Saturn business. ADP says Saturn dealers pay about $2,000 a month for dealership management services.