With barely two months to go before Cadillac radically overhauls the way it pays its retailers and imposes stricter standards on them in a bid to regain cachet, dealers still have a lot of questions.
For some of those seeking answers at Saturday's meeting with brand executives, the overarching question is whether the factory even wants them to be a part of Cadillac anymore -- and vice versa.
Cadillac President Johan de Nysschen insists he's not trying to cull dealers. But he also candidly calls the network of more than 900 U.S. locations a disadvantage because it's too large. An average BMW or Mercedes-Benz dealership sells five times as many vehicles as a Cadillac store.
Nearly half of Cadillac's stores sell fewer than 50 new vehicles a year. Many of those smaller retailers view Project Pinnacle -- the name for de Nysschen's incentive program -- as a way to ultimately weed them out. Project Pinnacle starts April 1 and requires dealerships in the smallest of five tiers to let customers order vehicles through "virtual showrooms" rather than keeping any inventory on site.
"This is honestly intended as a collaborative program that is designed to improve dealer profitability," de Nysschen said in an interview this month.
To those resisting Pinnacle, he said: "Does a dealer want to be part of the uplifting of the brand or do they want to be part of pulling it down? That's the question each dealer must ask themselves. If they want to contribute to the uplifting of the brand, there's money available."
Cadillac is spending $800 million on Pinnacle over the next three years, de Nysschen told Automotive News. He said dealerships that participate can earn much more than they do today, even if they fall short of sales targets, by meeting standards that grow more stringent as a store's size increases.
Brand executives have cited the fact that only 92 dealerships declined to enroll in Pinnacle -- with the holdouts accounting for a mere 1 percent of Cadillac's U.S. retail volume -- as evidence that the network is overwhelmingly on board. But one lower-volume dealer in the Midwest disagrees.
"It was kind of like hold your nose and move forward, and hope this thing continues to evolve," said the dealer, who didn't want to be identified while criticizing the program. "We're not totally averse to change. But we have to be sold on the change."
De Nysschen said executives have been "fine tuning" Pinnacle in response to feedback. He has delayed the start date twice, most recently after he said a series of dealership visits revealed that many needed more time to get into compliance.
"I believe, honestly, that every legitimate concern that has been raised has been addressed," de Nysschen said. "So many of the concerns that still float around are honestly just based on not understanding how the program works. But if a person is unhappy because the status quo is not maintained, that I cannot help."
Bill Wallace, whose Wallace Cadillac in Stuart, Fla., will be grouped with the brand's largest dealerships under Pinnacle, said he supports the program and de Nysschen's plan for Cadillac overall.
At the same time, he questions the timing, saying dealers are awaiting more competitive products to arrive starting in 2018 and therefore are not in a position to make the investments now being demanded.
"It's the classic manufacturer getting the cart before the horse," Wallace said. "It's going to cost money, and I think it's going to be at least 12 months before we start to see some return on that extra investment."