NEW YORK -- Nearly three-quarters of General Motors dealers will have started or completed store makeovers by year end, GM CEO Dan Akerson said today.
Akerson said better customer throughput and higher profits are allowing more GM dealers to spend on their stores.
"This represents a huge investment by GM and our dealers to improve their dealerships and make them more appealing to customers," Akerson said during a keynote address at an event sponsored by the National Automobile Dealers Association and IHS Automotive a day before the New York auto show's media preview.
GM is asking its dealers to meet facilities standards under its Essential Brand Elements incentive program, which was introduced about 18 months ago. Dealers who agree to improve their stores get quarterly cash payments that can be as much as hundreds of thousands of dollars for larger dealerships.
Largest in GM history
Last year, then-CEO Ed Whitacre called it the largest facilities-improvement program in GM's history.
Akerson said 3,330 of GM's 4,500 dealers will have embarked on or finished facilities improvements by year end. He said more than 90 percent of GM dealers are profitable, reiterating a figure cited in January by Mark Reuss, GM's North American president.
"Showrooms are bustling," Akerson said. "Dealers are in the pink and making money."
Some smaller dealers have said they would be unprofitable if not for the Essential Brand Elements bonuses. But they worry about spending money to renovate their stores during a still-fragile market recovery.
It is GM's goal "to have the best dealer relations in the business," Akerson said. "It's one of our top focus areas in the company, and a personal priority of mine," he said.
Response to quake
Akerson also touched on GM's response to supply chain problems stemming from last month's earthquake in Japan.
He said GM formed a crisis team "within hours" of the disaster that continues to manage potential supply chain disruptions from the earthquake. GM employees are on the ground in Japan to help suppliers stricken by the disaster.
GM has "crisis management centers" in Tokyo; Shanghai; Russelsheim, Germany; Sao Paulo, Brazil; and at its technical center in suburban Detroit "coordinating, facilitating and tracking all supplier issues coming out of Japan," he said, "allowing us to continue supplying our dealers with the cars, crossovers and trucks they need."
In other remarks, Akerson downplayed media reports that a Chevrolet Volt plug-in hybrid vehicle might have sparked a fire in a residential garage in Connecticut. Reports say fire officials are investigating whether the blaze, which consumed the garage, was caused by the couple's Volt, which had been parked in the garage alongside another vehicle.
Akerson said GM has had engineers on location conducting their own investigation.
"We are reasonably sure at this stage in time, not perfectly sure, but reasonably sure that it is not a Volt issue," he said.
Akerson said there also was a Suzuki in the garage that the owner "had completely re-wired himself." He didn't say whether GM believes that vehicle might have been a factor the fire.
A GM spokesman told the Detroit News: "We suspect the Volt was more the victim of the fire than the cause."
Akerson also said today that GM last November developed a contingency plan in the event that oil prices exceeds $120 a barrel, Akerson said. He didn't detail what the plan entails.
"I didn't think it would happen quickly as it did," Akerson said of this year's run-up in oil prices.
Akerson already had been pressing for GM to accelerate the development of more fuel-efficient cars, including a request to speed the production of the next-generation Chevrolet Malibu that GM unveiled in Shanghai yesterday.
When asked whether GM would move up development of its full-sized pickups, which was slowed by GM's 2009 bankruptcy, Akerson said it doesn't make sense to accelerate the program amid rising fuel prices.
"Trucks would not be a program that we'd move up in a mileage-sensitive market," he said.
Many of GM's dealers are eager for the next generation Chevrolet Silverado and GMC Sierra. Those are more profitable than the cars GM is rolling out this year, including the Chevy Sonic subcompact and Buick Verano compact.