GM executives woo auto dealers, buyers
Written on August 31, 2009
When General Motors executives stopped in St. Louis last fall to meet with auto dealers, the economy was entering a free fall.
"We were right in the middle of the meltdown when we were out doing this. We just didn’t know it," said Mark LaNeve, GM vice president for sales. "I mean we thought it was a bad couple of weeks. And as it turned out, the vehicle market was collapsing, the stock market was collapsing, the banking sector (too)."
Last week, LaNeve, CEO Fritz Henderson and other GM executives met with Midwestern auto dealers in downtown St. Louis for the first time since emerging from bankruptcy last month. The automaker is going forward with fewer brands, fewer vehicle "nameplates" and, ultimately, fewer dealerships.
The launch of the nine-city dealer tour comes at a pivotal time for the American automaker. The deep recession has hurt auto sales, and consumers have been lukewarm to some of its vehicle brands.
Henderson called last week’s meeting a good opportunity to reconnect with GM dealers and get people "charged up about winning in the marketplace." To do so, the new, smaller GM has to win back the hearts and minds of U.S. consumers, he added.
"For those people who own our vehicles today, and are happy with them, we want to make sure we make them even happier," Henderson said after the meeting. "And for those that don’t want to consider us, we want to compete and get back on their consideration list."
Several area dealers were upbeat about what they heard and the prospects for the future. The fact that Henderson attended this year’s meeting was further evidence that "they mean business; that they’re serious," said attendee Greg Flotte, general manager of Don Brown Chevrolet in St. Louis.
Flotte said there already had been some signs that it wasn’t business as usual at the new GM. When the federal government was slow to reimburse dealers on Cash for Clunkers rebates, GM came up within 48 hours with a loan program to help dealers who had not been paid car loans for bad credit.
"That would not have happened under the old General Motors," Flotte said. "To have that happen that quickly and take action that was effective was something that I was very, very impressed with."
General Motors plans to put more marketing muscle behind fewer vehicle models within its core brands — Chevrolet, Buick, Cadillac and GMC, LaNeve said. "We’re going to very aggressively get our story told. That’ll kind of start in September."
Dealers said they welcomed that focused approach to advertising.
LaNeve said reducing the number of dealerships proved "an enormously emotional, painful process." The company plans to shed about 1,200 dealers nationwide under its reorganization, but GM officials would not disclose how many are in the St. Louis region or elsewhere.
It also plans to sell off Hummer, Saturn and Saab, and discontinue the Pontiac brand.
"So we’ll have a 24, 25 percent reduction in the overall number of dealers, which we did to strengthen the dealers," he said. "We’ve got to have dealers that can compete."
The weakened economy has hurt demand for GM’s full-size GMC Savana and Chevrolet Express vans built at the company’s Wentzville plant, where GM eliminated one of two production shifts. But Henderson said that the van remained an important product and that Wentzville was "the only place where we build that van."
One analyst said GM’s campaign for the hearts and minds of consumers, dealers and auto enthusiasts was not unlike a political campaign.
"A lot of it, at the end of the day, is to get votes," said Erich Merkle, president of Autoconomy in Grand Rapids, Mich. "GM wants to be elected. They want to be perceived as a cutting-edge, high-quality company."
Filed in: management.