New, More Efficient Dealer Network Brings Upgrades, Increased Focus On Customer Care

by Alex Luft
Aug 15th, 2010

General Motors has concluded its dealer arbitration process and – effective November 1st – will have a network of 4,500 U.S. dealerships selling the company’s four core brands – including Chevrolet, GMC, Buick, and Cadillac.

New And Improved Facilities

GM’s revamped stores are participating in a major facilities upgrade program in order to align with GM’s new dealer branding guidelines. More than 300 upgrades have already been completed and 1,000 projects are scheduled through the end of 2010.

The initiative, which began in October 2009, is accelerating – with nearly 100 dealerships upgrading their stores every month. Major elements of the image upgrades include work areas with power outlets for phones and portable computers, Wi-Fi access, and a café with refreshments.

GM is also updating or installing new signs at Chevrolet, Buick, GMC, and Cadillac dealerships across the country. The signs include a contemporary design and reflect the current image guidelines for each of the four core brands.

“Customers throughout the country will be seeing a new look at the Chevrolet, Buick, GMC and Cadillac dealerships in their communities,” said President of GM North America Mark Reuss. “Putting our new dealer network in place is one of the most important elements in the rebirth of GM.”

Smaller But Still The Biggest

With 4,500 dealerships, GM’s dealer network is 25 percent smaller than that of early 2009, which was consisted of 6,049 stores. Compared to the previous network that sold 87 brand combinations, the new dealer body has dropped that number down to 15. This decreases complexity, provides greater operating efficiencies, and increased dealer throughput and profitability – all while providing existing and potential GM customers choice and convenience.

“Our dealers are the face of GM to our customers and valued members of the communities where they do business across America,” said Reuss. “We’re confident our dealer network will be the best in the business. It will be the right size with the right dealers to give our customers great service during and after the purchase.”

However, we must point out that even though GM has a reduced dealer count, our favorite automaker still faces similar potential problems when it did with 6,000+ dealerships. A bloated dealer network encourages cross shopping, making GM dealers in the same area/community compete for the same customer. Traditionally, this has lead to lower sale prices, killing dealer profits and resulting in lower vehicle resale values. What’s more, decreased profits rob dealers of other opportunities, such as facility upgrades and employee training programs, to name a few.

Higher Emphasis On Customer Care

Even though General Motors dealers historically rank near the top or above the industry average for customer service and sales satisfaction by third-party sources, Reuss noted that the new dealer network would be even more focused on being an industry leader in customer care.

The Backstory

GM offered wind-down agreements to 2,064 Chevy, Buick, GMC, and Cadillac dealers that it determined needed to transition one or more of those brands from the network by October 31, 2001 (coinciding with the running out of the dealer agreement). However, The General hit a legislative roadblock due to federal law passed in December of 2009.

Under the new law, General Motors dealers filed 1,176 arbitration cases with the American Arbitration Association to have their dealer agreements reinstated. Out of those 1,176, only 62 arbitration cases were completed.

GM sent out 702 Letters of Intent to involved dealers which granted them the permission to conduct normal operations as soon as they comply with the terms of the letter. GM has reached 408 individual resolutions with other dealers, most of which call for the dealer to continue the wind down process.

“We spent a considerable amount of time and effort to work toward a mutually agreeable resolution with our dealers,” Reuss said. “We’re pleased that we could complete this process in what we believe is an effective and efficient manner.

GM Confirms New Dealer Network
Structured to provide best retail experience and create positive, lasting customer relationships
2010-08-05

DETROIT – General Motors today announced that it has concluded the dealer arbitration process and that effective Nov. 1, it will have a network of about 4,500 U.S. dealerships to sell and service customers for Chevrolet, Buick, GMC and Cadillac vehicles.

The company also reported that many of these dealerships are participating in a major facilities upgrade program, with more than 300 updates already completed and about 1,000 projects scheduled through the end of 2010.

“Our dealers are the face of GM to our customers and valued members of the communities where they do business across America,” said Mark Reuss, president, GM North America. “We’re confident our dealer network will be the best in the business. It will be the right size with the right dealers to give our customers great service during and after the purchase.

“A strong, profitable dealer network selling and servicing the world’s best cars and trucks is a genuine market advantage,” Reuss said.

Although GM’s new dealer network is about 25 percent smaller than in early 2009, it remains the nation’s largest. This gives existing and potential GM customers more choice and convenience when it comes to where to buy a car and have it serviced.

“We spent a considerable amount of time and effort to work toward a mutually agreeable resolution with our dealers,” Reuss said. “We’re pleased that we could complete this process in what we believe is an effective and efficient manner.”

During its restructuring last year, GM offered wind-down agreements to 2,064 Chevrolet, Buick, GMC and Cadillac dealers that the company determined needed to transition one or more of those brands from the dealer network by Oct. 31, 2010, when the dealer agreement expires.

Under the provisions of a federal law passed in December, 2009, GM dealers filed 1,176 arbitration cases with the American Arbitration Association to have their dealer agreements reinstated. Only 62 arbitration cases were completed with decisions rendered. GM offered 702 Letters of Intent to involved dealers, allowing them to conduct normal dealer operations as soon as they comply with the terms of the Letter of Intent. GM has reached 408 individual resolutions with other dealers, most of which call for the dealer to continue the wind-down process. Four cases were dismissed.

In June, 2009, GM had 6,049 dealerships selling eight brands, with 87 brand combinations. The new dealer body will be much simpler, with about 4,500 dealerships, with just 15 brand combinations and four brands. This provides greater operating efficiencies and increased dealer throughput and profitability, enabling dealers to reinvest in their businesses to better satisfy customers.

Reuss noted that while GM dealers traditionally rank near the top or above the industry average for customer service and sales satisfaction by third-party sources, the new network GM is putting in place would be even more focused on being an industry leader in customer care.

Dealership upgrades

GM dealerships across the country are updating their Chevrolet, Buick-GMC and Cadillac facilities to align with new branding guidelines. This initiative, which began in October, 2009, is accelerating; dealerships are now upgrading their stores at the rate of about 100 per month. Major elements of the image upgrades include customer-friendly features such as work areas with phone and lap top computer power outlets, Wi-Fi and a café area with refreshments.

To support this effort, GM is updating or installing new signs at Chevrolet, Buick, GMC and Cadillac dealerships across the U.S. The signs feature a more contemporary design and reflect the current image guidelines for each brand.

“Customers throughout the country will be seeing a new look at the Chevrolet, Buick, GMC and Cadillac dealerships in their communities,” Reuss said. “Putting our new dealer network in place is one of the most important elements in the rebirth of GM.”

About General Motors:

General Motors, one of the world’s largest automakers, traces its roots back to 1908. With its global headquarters in Detroit, GM employs 205,000 people in every major region of the world and does business in some 157 countries. GM and its strategic partners produce cars and trucks in 31 countries, and sell and service these vehicles through the following brands: Buick, Cadillac, Chevrolet, GMC, Daewoo, Holden, Jiefang, Opel, Vauxhall and Wuling. GM’s largest national market is China, followed by the United States, Brazil, Germany, the United Kingdom, Canada, and Italy. GM’s OnStar subsidiary is the industry leader in vehicle safety, security and information services. General Motors acquired operations from the former General Motors Corporation on July 10, 2009, and references to prior periods in this and other press materials refer to operations of the old General Motors Corporation. More information on the new General Motors can be found at www.gm.com.

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