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REPORT: GM preparing to give more dealerships the axe
On top of the 1,124 General Motors dealers that will be closed next year, the ailing automaker is reportedly going to announce another round of dealer closings on Monday when its bankruptcy declaration is expected. According to two Automotive News sources, 450 dealers will not see their dealer franchises renewed. For his part, Mark LaNeve, GM's VP of North American sales, said the number would be "less than half that."
No matter the number, it's more of the same bad-yet-necessary news being spread around. LaNeve notes that the dealers who won't be renewed "have very specific issues" including "specific performance issues." Among them are supposed to be some stores that are skewed exclusively or heavily Pontiac. These dealers will be shutting up shop when their franchise agreements expire in October 2010.
[Source: Automotive News -sub req'd | Image: Mark Ralston/Getty]
Reader Comments (Page 1 of 2)
oinky 6:55PM (5/29/2009)
first!
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ronEbear 7:01PM (5/29/2009)
second!!
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ronEbear 7:01PM (5/29/2009)
second and a half!!
versionII 7:05PM (5/29/2009)
They should axe dealerships that sell the same car but w/ a different brand name.
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Driver X 7:09PM (5/29/2009)
They should axe dealers with poor customer service. Get rid of the scum.
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Peter 7:24PM (5/29/2009)
all you first and second idiots need to really shut the hell up. that crap is stupid and pointless
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xtasi 7:40PM (5/29/2009)
could some explain, how having too many dealers affects GM? I would think that the more outlets the better off GM is. Does GM sell the car to the dealer, or is it still in GM's name until a customer signs the dotted line?
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jpm100 7:56PM (5/29/2009)
Just guessing here, but since they would sell more cars per dealer, the dealers would need less of a cut per car to be profitable.
So they can either offer better deals to customers or GM can charge less and/or make more on the base price.
Dave King 4:12AM (5/30/2009)
You obviously don't understand mass retail or distributed sales channels. There are not just too many dealers, but too many small dealers. The mom & pop shops, and dealers of any size with bad customer service, are the problem. They are...
-- the slowest to respond to leads
-- most likely not to respond to specific questions in leads or in e-mail (availability, pricing)
-- have the lowest conversion-to-sale rates (Auto Nation has double the conversion rate)
-- most likely not to have a dedicated Internet manager to manage lead and customer e-mails
-- most likely to provide unsatisfactory service
Whether you like the big guys or not, the Auto Nations of the world invest in better trained staff. They respond quicker and more completely to leads; they provide both better selling experiences and post-sales servicing than the small dealers. Plain and simple.
Here is why GM needs to purse thousands of small and under performing dealers:
(1) Small and crappy dealers are killing GM cos they don't respond as well to leads, and hence struggle to sell vehicles. Lost sales = lost selling margin for GM. GM loses.
(2) When said small crap dealer provides bad service, the owner blames GM for the bad experience, and buys a competitive vehicle the next time around. Defection = lower LTV for GM. GM loses.
It's simple economics a grade 6 student can understand.
tuna 7:49PM (5/29/2009)
Sales? Shouldn't it be just "sale"?
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207guy 8:14PM (5/29/2009)
I agree with Peter, the first/second comments are old, old, old....get a life.
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duc1 12:03PM (5/30/2009)
One needs only to visit the dealership in the picture (it's in Santa Monica) Z06's languish in the showroom full of dust. The parts area is a mess with zero customer service. Sales and advertising materials over a year old dot the showroom.
What a mess...
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Saxxon 9:15PM (5/29/2009)
I wonder if a majority of the GM dealers getting the axe donated to the republican party, just like the majority of the Chrysler dealers that were told to close shop?
Government control of private business, the first step in creating a socialist, communist state.
Hope you guys like wearing red.
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Venom 12:34AM (5/30/2009)
You are clearly not a bright guy.
My friend lost his Dodge dealership and he is a Democrat.
If we wear red it will because the Republicans shipped all the jobs and manufacturing over to China.
Last time I checked Obama was trying to save and create jobs in this country.
Scott 1:38AM (5/30/2009)
True, the majority of the Chrysler dealers who are being targeted for closing donated to the Republican party...
In fact over 80 % of ALL car dealers who donate to political parties donate to the Republican Party, this includes the ones that are staying open.
Fox News didn't mention that second part did they?
EU_reader 9:01AM (5/30/2009)
You pathetic redneck... I'm sorry, but that's all I can say.
This ridiculous statement has been debunked over and over already by real journalists, it's not even funny that you (or other people for that matter) keep rehashing the same soundbites, over and over and over again.
Like f*cking PARROTS... That's right, be proud of it.
Someone said it, you don't seem to be very bright guy. And if 80% (or even more) donate to republicans, how the hell are you going to close half the dealerships without involving reps in it? Imbecile
Toledo Guy 9:19PM (5/29/2009)
"Among them are supposed to be some stores that are skewed exclusively or heavily Pontiac."
Wouldn't that have made sense in the first round, since Pontiac had been served with it's death notice before those cuts were made?
Once GM files Ch11, it'll be nearly impossible to overturn these cuts. But they should have happened years ago. Much like just about anything else GM should have done to restructure the company. But it'll all be better once the Feds own GM.
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Driver X 9:51PM (5/29/2009)
I don't see how cutting dealers will cut costs for GM? GM gets paid by the dealer as soon as the vehicle is built and rolls of the line. When you see a truckload of vehicles going down the road, they have already been paid for.
Fewer dealers will make the remaining dealers more profitable and the consumer will pay more with less competition. Since the Government will own GM, will they still publish cost on the internet?
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Venom 12:42AM (5/30/2009)
A GM dealership in Frankenmuth Michigan got the axe in a different way.
A few weeks ago they had all their cars pulled by GMAC and they were supposed to get new financing and have new cars. It never materialized and today they closed their doors.
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Frank 7:18AM (5/30/2009)
Nice job of repeating Dem talking points (watch MSNBC much?, well not too many other people do!).
"$4-$5 gas, what did Bush say about that, nothing, kept talking about Iraq.
If the Republicans were still in we would be invading Iran now spending another trillion here and there."
Bush opened up offshore areas for drilling, but the Democrat congress would have none of it, 'cause we couldn't, you know, drill for our own oil, how un-american that would be! Since Iran has been on a full court press to go nuclear, the Bush administration has been using diplomatic channels and the UN to get Iran to suspend its nuclear program. (uhm, the same UN they used before freeing Iraq, you do remember the vote, don't you?)
Meanwhile your favorite guy BO said he would invade Pakistan to flush out Bin Laden. I wonder what he is going to do now that Pakistan appears headed for turmoil?
"I can't even count on one hand how many times Bush talked about health care or taking care of the people in this country because it was never."
America and many nations have established a global fund to fight AIDS, tuberculosis, and malaria. America has undertaken a $15 billion effort to provide prevention and treatment and humane care in nations afflicted by AIDS, placing a special focus on 15 countries where the need is most urgent. AIDS is the greatest health crisis of our time, and our unprecedented commitment will bring new hope to those who have walked too long in the shadow of death.
Source: Address to the United Nations General Assembly Sep 21, 2004
America's children must also have a healthy start in life. In a new term, we will lead an aggressive effort to enroll millions of poor children who are eligible but not signed up for the government's health insurance programs. We will not allow a lack of attention, or information, to stand between these children and the health care they need.
Source: 2004 Republican Convention Acceptance Speech Sep 2, 2004
A government-run health care system is the wrong prescription. By keeping costs under control, expanding access and helping more Americans afford coverage, we will preserve the system of private medicine that makes America's health care the best in the world.
Source: 2004 State of the Union address to joint session of Congress Jan 20, 2004
The President's budget includes $1.5 billion for Community Health Centers, a $114 million increase that would continue the Bush Administration's long-term strategy to add 1,200 new and expanded health center sites over five years and serve an additional 6.1 million patients. The increase for fiscal year 2003 will support 170 new and expanded health centers, and provide services to a million more patients.
Source: Campaign website, www.georgewbush.com Aug 30, 2003
"All that warmonger wanted to do was keep spending money on wars in the Middle East. I don't think he has even mentioned Bin Laden's name in 2 years."
Once again, Mr Bush insisted that the use of force was the "last option" and that Washington would much prefer President Saddam to disarm voluntarily in compliance with the demands of the UN.
Bush rallies troops for Iraq but insists war is 'last option'
http://www.independent.co.uk/news/world/americas/bush-rallies-troops-for-iraq-but-insists-war-is-last-option-608967.html
Whoa! Wait a minute. Did that article say the UN? I thought Bush just woke up one day and said, "I think I'll invade Iraq today".
You know Venom, you need to listen to more than Keith Oberman, Rachel Maddow, or NPR if you want to know what is really going on.