The day after General Motors Corp. CEO Rick Wagoner announced widespread plant closings and job eliminations, he was in New York for a regional dealer meeting.
The session already had been scheduled so it was a “coincidence of the calendar,” says Wagoner. But it also turned out to be an opportunity to meet with dealers in a major market, answer their questions and try to ease their fears.
“It was a great chance to say, ‘Here's how we see things,’” says Wagoner. “It was a chance to put it in context.”
He says their was “massive confusion” among dealers who feared that curtailing production by 800,000 units down to 4.2 million would leave them thin on inventory.
“I said, ‘Wait a second. Please read the whole announcement. It's 4.2 million. It's two-shift rated capacity. We can provide whatever you need. We can assure you of that. We've got flexibility in the plants.”
Dealers at the New York meeting and at one just before that in Los Angeles also expressed opinions, pro and con, on GM's Red Tag sale incentive program in which the price on a vehicle's tag is what customers pay.
“It's the greatest think we've ever done or it's not great at all. We heard them both at each dealer meeting,” says Wagoner.
He adds: “There's really not a dealer perspective on topics. There are a lot of dealers and they do their businesses differently and they have different perspectives. That's what makes the meetings fun.”
That also makes for important brand differentiation.
“You don't have the same message for every group of dealers,” says Wagner. “Brands are going to play different roles, and everybody is going to play their positions. If you are a great shortstop, you do not next inning get to play first base. If you're a great pitcher, you're going to pitch.”
He says that driving GM's initiative to bundle Buick, Pontiac and GMC into single dealership franchises — with each franchise having a limited lineup, but a full one when together — “is very much about having clearly defined brands that play their positions.”
That effort has seen “great success stories,” including “huge progress in LA,” says Wagoner. “Maybe a little less so in the Northeast. Getting that aligned will help us and dealers because it will give them a better profit opportunity.”
He cites mixed success in keeping dealership facilities modern and in right locations. “Some places are in good shape, others not,” says Wagoner.
He says GM needs “to do a better job in a number of metro markets.” He cites south Florida as one such market, while touting Los Angeles as an urban area where progress has been made.