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Friday Excuse to Go Hom Early and Drink: GM to Close the Last Cadillac Dealer in Detroit

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  • Friday Excuse to Go Hom Early and Drink: GM to Close the Last Cadillac Dealer in Detroit

    http://www.bangshift.com/blog/Friday...n-Detroit.html

  • #2
    Re: Friday Excuse to Go Hom Early and Drink: GM to Close the Last Cadillac Dealer in Detroit

    That is about the closest thing I've seen yet to GM just renting billboards to say our 'ol homeboys are now just a bunch of pee-you-ess-ess...well, you get the picture. The claim that each vehicle costs momma co. a thousand bucks in dealer support, which will drop drastically by cutting dealers miffs me. Just cut the dealer support then! The strong/committed dealers will survive...let them be the ones to hash it out in the market. Or is this all just an excuse to get rid of uncooperatives.
    ...

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    • #3
      Re: Friday Excuse to Go Hom Early and Drink: GM to Close the Last Cadillac Dealer in Detroit

      The only way that I see that GM can save money is if they have to build a certain number vehicles for each dealer. More cars being built than the market wants and needs right now. Building cars they can't sell. In essance, closing a certain number of dealers means GM has to build less cars, closer number to the current market demands.

      This is just my stab in the dark, as I don't know squat about the contracts between GM and their dealers.
      BS'er formally known as Rebeldryver

      Resident Instigator

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      • #4
        Re: Friday Excuse to Go Hom Early and Drink: GM to Close the Last Cadillac Dealer in Detroit

        As I recall the article in our paper, isn't it in fact the last Caddy dealership in DOWNTOWN Detroit (which is a little different than "in Detroit")?

        Nevertheless, it's clear that the execution was poor and showed extreme disrespect on the part of the corporate mothership for the dealer. Even accepting that hard times demand hard measures, that's no reason to abandon being a class act.
        Michael from Hampton Roads

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        • #5
          Re: Friday Excuse to Go Hom Early and Drink: GM to Close the Last Cadillac Dealer in Detroit

          I have to call shenanigans on the Reuters story. First, he is not the only Cadillac dealer in Detroit or within the city limits. Massey Cadillac is right up the road at Grand River and 7 Mile. There are eleven Cadillac dealers in the metro Detroit area, actually. Lexus has two. That's the whole problem: too many dealers, especially in old locations.

          Next, the dealer principal is not telling the whole story as to how he was terminated. Every dealer got a registered letter and a visit from the zone manager. That is the policy. This dealer appealed that action, as is his right, and the appeal was denied. That is the notice he got in the mail.

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          • #6
            Re: Friday Excuse to Go Hom Early and Drink: GM to Close the Last Cadillac Dealer in Detroit

            Bill, thanks for clarifying and shedding more light on how this stuff works than anyone has thus far. As tough as things are in Detroit, it still seemed strange that there would be only ONE Cadillac dealer in the area.

            Thanks again for the info.

            Brian
            That which you manifest is before you.

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            • #7
              Re: Friday Excuse to Go Hom Early and Drink: GM to Close the Last Cadillac Dealer in Detroit

              I grew up in car dealerships, more or less, so I tend to have less sympathy for car dealers than most people. You flat-rate wrenches and other current and former dealership personnel will know what I am talking about.

              A shoe salesman will not try to rip you for 20 percent over list just to see if he can, but a car dealer will. Those are the rules of car dealers and they wrote them. You may think I am painting with an overly broad brush but the average car dealer really does have a different moral compass (adjustable). And they will often treat their employees the same way because that's all they know. They believe that's how the world turns. It's the art of the deal, babe. Until I got out of car dealerships, I half thought cheating and chiseling were the way of the world myself. But the average businessman, unlike the average car dealer, is square and honest and keeps his word.

              I'm enjoying how many of them are now painting themselves as Ma and Pa businesses. That's a strain of humility they don't usually project. Sure, if Mom and Pop are country-clubbers with a 60-ft boat and a condo in Arruba. Back in the good old days, the moment you got your GM ticket you became a millionaire and a pillar of the commnunity. That world is now gone forever but the unbelievable sense of entitlement remains. Listen to them: These folks really do believe that GM and the world OWE them this station in life. They claim they were granted their franchises for all eternity but if you read the franchise agreement there is a date on it. One rule of life: Nothing is forever.

              In their minds these dealers are getting a raw deal. Wait, I thought raw deals made the world go around. Maybe they could ask themselves how square they treated their own people along with their customers. They got a lot better than they gave, so no crying now. What goes around, comes around.

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              • #8
                Re: Friday Excuse to Go Hom Early and Drink: GM to Close the Last Cadillac Dealer in Detroit

                I know next to nothing about the new car business, I'll be up front with that. I cannot speak for Detroit, but here in my home town the only Cadillac dealer was notified that it will no longer be such a dealer. It was also a Pontiac dealer and continues to be a Honda dealer (maybe that was its problem). The dealer has never been noted as a one of the area's best or best liked, but it was the only Caddy dealer here. Now the closest Cadillac dealer is about 35 miles away. I am glad I didn't buy a Cadillac and now have warranty problems and have to get it that far to have them addressed. From what I have been told GM has no plans to allow another Cadillac dealership to come into this area.





                ++

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                • #9
                  Re: Friday Excuse to Go Hom Early and Drink: GM to Close the Last Cadillac Dealer in Detroit

                  Wouldn't it make more sense to only build cars for people who have the money to buy them instead of building (tens?) of thousands waiting for someone to come along and settle for what's there on the dealers lot. A dealer could save a whole bunch of money if they only had to provide a demo model for the buyer to help them consider their purchasing options.

                  Just my two cents

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                  • #10
                    Re: Friday Excuse to Go Hom Early and Drink: GM to Close the Last Cadillac Dealer in Detroit

                    Originally posted by 2bbl318
                    Wouldn't it make more sense to only build cars for people who have the money to buy them instead of building (tens?) of thousands waiting for someone to come along and settle for what's there on the dealers lot. A dealer could save a whole bunch of money if they only had to provide a demo model for the buyer to help them consider their purchasing options.

                    Just my two cents
                    Yes, it sure would. Good eye. Overproduction has been a way of life for the Detroit automakers for decades, for a whole bunch of reasons. For one, it was seen as cheaper to keep the plants running in a downturn and sell the overproduction at a discount, which reduces profits but maintains market share. And market share is how the automakers justified many of their decisions, in the belief that it built long-term security. So they overproduced and then moved the units any way they could. There is an old expression in Detroit, and kind of a stupid one: they sell every one they make. Which they eventually do; it's not like they push the surplus into the Detroit River. The question is are they making money at it, and we have learned the answer to that.

                    Another justification for overproduction is too many dealers, which require too much lot inventory spread over the dealer network. Most buyers won't factory order. Once they work up the guts to buy they want it now and they want to see it and touch it first. But to move all that inventory by the end of the MY requires deep discounting and big rebates, zero financing, heavy advertising, etc, from the mfg'ers, reducing sales margins. Meanwhile the dealers are all cutting each others' throats as buyers go deal-shopping. At the same time, for many dealers the biggest operating cost is floorplan -- the bank interest on the vehicle inventory.

                    You can see how this whole system created a sort of slow-motion death spiral. Culling the dealers to a realistic number will discourage overproduction and will allow the mfg'ers and the remaining dealers to maintain higher sales margins. GM's dealer organization was built when it owned 51 percent of the North American car market, when today it has less than half that.

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                    • #11
                      Re: Friday Excuse to Go Hom Early and Drink: GM to Close the Last Cadillac Dealer in Detroit

                      I dunno...we're not big on the deferred gratification thing in N America and a majority of folks, I suspect, are happy to buy something that is CLOSE to what they want, as opposed to waiting weeks or months for EXACTLY what they're looking for.

                      In the broader scheme what you suggest makes sense and I understand companies like Tata out of India propose to go down the path of the 'mail-order' car concept.

                      But old habits die hard and bad experiences are long remembered. I've NEVER ordered a car direct from the factory (hell, only once bought brand-new and took the big depreciation hit), this in part based on the memory of my Dad ordering a new Chev in 1965 and having it show up with a 4-speed manual instead of an automatic (or so he said when my mother got owly about it ;D ).
                      Michael from Hampton Roads

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