GM's New Deal

For those of you who have been paying attention, you may notice that General Motors has undergone a major facelift of several of its dealerships over the past few years.

It's kind of hard to miss.  The soon-to-be signature blue tiles of Chevrolet dealerships and the silver tile of Buick and GMC dealerships, all complete with new signage.

GM has unfairly received a lot of critical backlash over the past few years.  Whether is was taking government-offered assistance to ensure the brand's survival, or starting this program to facelift its dealership network, with the automaker picking up the majority of the tab for its dealers.

This backlash, to me, is not fair.

I'm a second-generation motorhead.  I not only pay attention to what's under the hood, but what all goes into the production of an automobile.  From its engineering to its purchase.

For a period of 18 months, I worked for Mazda's Flat Rock assembly plant in southeastern Michigan, about 20 miles south of Detroit.  During my tenure, the plant produced the 626 and the MX-6 models, including the Ford Probe through Auto Alliance, a joint endeavor between Ford and Mazda of North America. 

My job was to take cars off the assembly line and either move them into the storage yard or lines for shipping by truck or rail.  Or we pulled cars from the storage yard into the shipping lines. 

Our busiest time of the year was the first quarter, when dealers were replenishing their stock after the year-end closeout sales.  This meant seven-day workweeks and sometimes 10 to 12 hour days...all in sub-freezing temperatures and blizzard-like conditions.

Not always a pleasant place to work.  Nonetheless, I still had fun doing it, and still have many happy memories of the place.  

Thus, it was only natural that I keep an eye on the industry years after leaving it.

I especially paid attention to GM's plight, and how the conservative capitalist purists insisted that the brand be allowed to die.

To do so would have cost not just thousands, but MILLIONS of jobs.  Not just at GM, but the subcontractors that produce parts for the automaker.  The network of approximately 6,000 dealerships nationwide, many of which employed at least 50 people.  

And there would have been the domino effect on the other brands that didn't have to fold, now that consumer confidence had been shattered forever due to the demise of what used to be the largest corporation in the world for decades.
One person still has yet to offer me a plausible solution that would have been an effective alternative to the federal bailout.

Let it die...real smart, huh?

But the brand hasn't died.  It's come back.

And it's done so in a big, big way.

GM has trimmed its dealer network to approximately 4,300, which has allowed it to be administered much more efficiently.  The retail brands have been trimmed from seven to four.  Its new dealership renovation program has the goal of providing uniformity and instant recognition not just with the vehicle's badging, but the 'badging' of its dealerships as well.
It only makes sense.  As a society no longer limited to the geographic borders of its native land, we have had more foreign-born citizens coming to the U.S. than ever before.  Those who were not born with English as their first language.  The common appearance of the dealerships don't require a strong command of the English language to know what can be found at one.  The color and badging do the work for you.
Ever wonder why controls inside vehicles have symbols instead of words these days?

By the way, this is nothing new among the Big Three.  Just a different take on what Chrysler did several years before when many of its dealerships took on a southwestern hacienda-styled motif, and Ford adopted new signage.

And there are rules.

To participate, the dealer can only show it's GM-licensed brands in the showrooms.  Foreign branded new vehicles owned by the same dealer must be located in a separate showroom with its lot separate from the GM vehicles.  

The program is strictly voluntary, but it's hinted that non-participating dealers had better be producing impressive sales numbers if they want to keep their franchises.  Some of those in the program have gone the extra mile and built entirely new facilities according to GM standards.

I heard one man complain recently "all done with (taxpayer) money."  

Read the papers, buddy.

GM paid back every penny they borrowed from the feds.  Its leadership at the time was smart enough to realize that any negative publicity generated by asking for loan forgiveness or an unreasonably long term of repayment, could kill the badly-injured brand.  

And people are buying again.

Many GM dealerships are now reporting that 2013 could be their best year ever, in terms of sales figures. Not only that, but people are buying the larger pick-ups and SUV's, as opposed to the "loss leaders" (aka subcompacts) when the industry's rebound began.

GM has not only regained a foothold in the new car market, but it has worked hard to increase its brand awareness and live within its means.  Unfortunately, it had to learn this lesson the hard way like other companies when the housing market collapse of 2008 created the domino effect that still has our economy healing.

Healing is always better than reeling.

NEXT WEEK:  For Kidd's Sake