How many Cadillac dealers received the letter?

[Rusty Shepherd CLC 6397]

Does anyone know how many of the 1,100 or so GM dealers that received "Dear John" letters were Cadillac dealers and Cadillac-only dealers?

[Joe Manna]

Rusty,off hand,I don't know.But all I know is that,Royal Cadillac here in NJ,better not be one of them.We are having our region show there on June 13th.!

Joe

[Otto Skorzeny]

That won't be a problem even if they did get a letter since the contracts are through October 2010 as I understand it.

[Rusty Shepherd CLC 6397]

My guess is that a smaller percentage of Cadillac dealerships got the letter than other GM dealerships (particularly Chevrolet) since there are not nearly as many of them. Something else that occurred to me is whether some multi-make dealers will lose the ability to sell one or more of the makes/brands they currently sell while being allowed to keep one or more of the others; Ceceil Atkission (originally Peterson's) in Kerrville, TX , for example, has sold Chevrolet, Pontiac, Oldsmobile before it was discontinued, Buick and Cadillac since the 1920's. Another factor is location. When I first read about a year ago that GM was planning to thin its dealer ranks, the article said that more urban/suburban dealership would be cut than rural ones. Mark Leneve said yesterday that between 400 and 500 GM dealerships last year sold fewer than 35 vehicles which made me wonder how they have managed to stay in business this long.  Most dealerships make as much or more on service than sales, but if you are selling only 2 to 3 vehicles a month, your service department is not going to be doing much business either.

[Tom Hall 7485]

The Cadillac dealers who are most likely to have received the letter are those who:

(1)  Are not strong in new car sales and are too close to a moderately strong GM dealer;
(2)  Have a weak service department;
(3)  Are "dual" dealers whose other brands are to be discontinued, e.g., Cadillac-Pontiac, Cadillac-Saturn;
(4)  Are "dual" dealers whose other brands are to be sold, e.g., Cadillac-Hummer, Cadillac-Saab; and/or
(5)  Are "dual" dealers whose other brands are outside of GM, e.g., Cadillac-Nissan

The dealers who have reasonably good volume in Cadillac and who have kept their premises up-to-date
have a better chance of survival than the above.  It's the rural and less affluent areas that will lose the
biggest share of GM dealers.  Cadillac-Chevrolet will become the usual pairing for dual dealers.  Fifty years
ago it was more likely to be Cadillac-Pontiac or Cadillac-Oldsmobile.

Solo Cadillac representation is the minority of dealers and probably always has been.  Even in the brass era,
few retailers sold just Cadillacs.  Cadillac's early sales manager, William Metzger, is credited with making the
first retail sale of an Oldsmobile.

For a long time, GM has tolerated low volume in Cadillac when the other brand being sold has satisfactory
volume.  You'll see this in a Self-Starter in the very near future, I think.

[Rich S]

This episode in GM's history is deplorable, in my opinion. Criterion such as whether the premises are kept up-to-date is quite subjective, and something such as the facilities may have little or no bearing on the Customer Satisfaction Index. Many long-time dealerships have established Cadillac as a premiere American brand--and now they face the potential of having their franchise severed? This is not how business should be done. If my Cadillac dealer is axed, it is the only scenario I can envision that will have me buy an imported luxury car! I'll be through with GM, if this occurs.

[Otto Skorzeny]

That's a pretty narrow view to take. 

GM has known for a long time that it's dealer network was bloated and too many markets were over-served. This is strictly a sound business decision that is long overdue.

They aren't just going to ax dealerships willy-nilly. If a dealership is performing  properly and serving it's customers and the surrounding area satisfactorily, it will remain. If two dealerships are overlapping coverage, the one with the best numbers is going to stay - as it should be.

To keep under-performing dealerships simply because they've been around for a long time is, in the words of Lionel Barrymore, "sentimental hogwash", and has no place in the business world. GM is in the business strictly to earn money selling cars. Period.

[Rich S]

If there is an objective, evenly applied, criterion, then the Cadillac dealership my family has dealt with for over thirty-three years will survive. However, reading a few articles such as the following one, it caused me concern:

http://www.cleveland.com/business/index.ssf/2009/05/gm.html

I do not know this particular dealership, from Parma (outside Cleveland), but from this information, I feel empathy for any GM franchise owners who may have received such notices. I'm a fanatic on Cadillacs, and my family has owned them since I was seven years old (in 1970)--and I continue to buy new ones, besides having a vintage one. It concerns me that since I buy from a long-time Cadillac dealership, in an older, urban facility, they may be included. In my opinion, it appears wrong for GM to be treating their dealers in this manner.

[Otto Skorzeny]

I live in Atlanta but was born in Parma Hospital. I grew up in Olmsted Falls.

Dealers knew the stakes when they originally signed a franchise agreement and understand that it's strictly business. Many have been skating along as their business declined and sales figures shrank. For some, selling a handful of cars each month may have been enough for them to stay open but it doesn't justify GM's continuing support. Again, it's strictly business.

In good times GM could afford to carry under-performing dealerships. That isn't the case any more. I hate to see long time dealers close too but if they aren't making the required number of sales, they can't expect to be supported by GM.

I would hope that you would continue to buy Cadillacs from whatever dealership remains to serve the South Side. GM isn't pulling the plug on dealers out of spite or meanness, it's just a matter of utilizing scarce resources in the most efficient manner.

Let me say that any dealer who loses his franchise and claims that it's a shock or complete surprise is a liar. They have known for years that this day was coming and they are all aware of the requirements that needed to be met in order to remain a GM dealer.

[grinch]

I'd have to agree with Otto.  Gm needs to stay alive to sell cars (aka make money), simple as that.  If cutting dealerships that aren't moving their product is part of saving themselves, then that's what needs to happen.  I would rather have GM make it through the hard times and learn from it than going out of existence altogether.  We have many many GM dealers in our area that I have been amazed for years that they have survived this long.  If they are selling cars, they deserve to stay.  If not, it's a shame for some, but they need to go. 

[Rich S]

Here is a link to a list (incomplete, but growing) of the GM Dealerships affected:

http://www.huffingtonpost.com/2009/05/15/gm-dealerships-closing-se_n_204031.html