Gang Bangers and Soccer Moms

    So, why cut dealers - there never was a good reason as far as we were concerned!
In February of 2009, the Obama administration set up a task force to work with GM during the financial bailout.  Someone, I'd so like to know who, came up with the suggestion to look at Toyota's success with only 1,400 dealers compared to GM's 6,000+ dealers. Getting closer to that magical number became part of the restructuring plan along with closing plants, terminating brands, UAW concessions, etc.
    In order to receive over $40 billion from the government, GM was required to provide a plan.
Interestingly - the automotive advisor to the government task force(car czar) was later involved in two separate fraud investigations where he paid some $16 million to keep his ass out of jail. He never had any automotive experience. So goes it...
    In June of 2009, Fritz Henderson appeared before congress and was asked to give reasons for closing dealerships.  Here are a couple ways that GM was to save $1 million per closing:

1. Advertising -
   WRONG! GM didn't pay for individual dealer ads, the dealer paid for those and also had to pay a fee to GM just to make their own ads. Dealers also paid showroom displays, color charts and brochures(we paid GM $20 per Cadillac brochure).
2. Training -
   WRONG! Dealers paid for their own training for sales staff and technicians.
3. Rebates -
   The logic behind this point was less dealers...less cars sold... less rebates paid out.  HUH? They wanted to sell LESS cars?

    Our thoughts are that dealers don't cost GM a dime.  If a dealer didn't sell ONE car, GM would still make money from the dealer through:
           1. franchise fees
           2. GM charged dealers fees just to communicate with them via the internet.
           3. Dealers paid GM for signage. Our Dalgleish Cadillac exterior sign was $600 a month.
               We had 3 of them.  That is $21,600/year for 3 signs!
           4. GM required dealers to buy between $10,000 and $75,000 a year worth of special tools just
               to have on site.  It was common that many of them were never needed or used.
           5.  All cars and parts were paid for up front by dealers to GM.
    These are just a few ways that dealers paid their own way. How they could say that it would save them $ was ludicrous from our perspective. It was just a smoke screen for the much bigger money grab.

    So, why us?  Why were we one of the casualties?
The first round of cuts were supposed to have been made using criteria that related to sales effectiveness.  It was known that GM's people looked at how a Cadillac dealership compared with its luxury brand competitors in its own marketing territory.
    In our specific territory, people were buying more Cadillacs than Mercedes, BMW, Lexus or Lincoln and that made our "market effectiveness" very good. the other criteria was the Dealer's Customer Satisfaction Index (CSI) rating. There too, our numbers were among the nations best.  It was 90%, which was almost unheard of.
   So, how was GM going to cut more dealers as was the plan?  Well, they waited until the DAY AFTER bankruptcy was filed and then under the guise of bankruptcy they were able to violate Michigan's franchise laws.  It seemed to us like they did whatever they wanted to do - get rid of problem dealers, take away from one dealer and give to another.  This is where we saw favoritism in the Detroit area.  There is a dealer we know who had been in business many years. The back story is that their location was bad and they were terminated.  The franchise rights were awarded to a different dealer who has now been allowed to set up shop in the same "bad location". Shame on you, GM!
    We were never given a reason at the time of termination.  An official out of Chicago (who later denied this) told us that we sold too many cars to suburbanites from our location in the city. Uh, shouldn't that say something good about us? We were able to bring people into the city!  After 4 generations of family members spread throughout the area, were we not supposed to sell cars to family, friends and neighbors?
    Shortly before we were cut, the head of Cadillac made a statement to a group of marketing and advertising executives stating that Cadillac didn't want to market to "gang bangers" and wanted to target "soccer moms".  We were an inner city dealership.  You can draw your own conclusions, but the customers at our dealership were diverse: church ladies, working people, the last 4 mayors of Detroit, professionals who worked in the city and many more everyday people. That is insulting!
    Good luck to the soccer moms in Novi!
    For whatever reasons, Detroit was no longer right for Cadillac.  There is no Cadillac dealership in the city of Detroit now.  For service, our customers have to leave the city and head to the suburbs.  Just another reason not to go to Detroit as we have heard it said many times!
    I have to say that there were so many more things that occurred that it is impossible not to be bitter. To know some of the inaccuracies, to feel that there were "back room" deals, to see what has transgressed in our area... that gets to you.  The word termination sounds so clean and final.  That is not how it is, you can believe that.
In the next blog: Who we appealed to for help
                           Signing away our lives and the next step