There’s no doubt General Motors hopes to get back to profitability, and all the cost cutting measures we’ve seen in the last few months are the living proof of that. But the recently announced massive dealership cut has often been described as a bit too drastic anti-crisis measure, as about 1,100 dealers will be rejected by the end of 2010. Translate this into the number of involved workers and you get tens of thousands of people directly affected by GM’s decision.
After closely collaborating with NADA on the dealership cut, GM’s CEO Fritz Henderson assured once again the authorities that General Motors will do its best to support affected dealerships while remaining focused on its own restructuring process.
Henderson said in an oral testimony that GM plans to develop a profitable business plan comprising between 3,500 and 3,800 dealers across the United States that would support the company’s growth in the post-bankruptcy period. Furthermore, for dealers it would translate into more profits and the ability to attract and retain new consumers, Henderson explained.
“Our dealership consolidation is not just about saving money, but about creating opportunity and revenue growth. It's about our dealers augmenting our efforts to greatly enhance consumer perception in our products, brands and General Motors-directly and on a daily basis. That is why in every other aspect of retail business-from Harley Davidson, to the Apple stores and yes, Toyota and Honda, you see the premium that is placed on creating a distinct, consistent and topnotch retail experience,” he said.
“Even with these cutbacks GM will still have the largest dealer network in the country - more than any of our competitors. In our case, around 3,600 v. Toyota's 1,200. This would include an extensive rural network of 1,500 dealers nationally...in markets where we hold, on average, more than a 10 point advantage in market share.”
After closely collaborating with NADA on the dealership cut, GM’s CEO Fritz Henderson assured once again the authorities that General Motors will do its best to support affected dealerships while remaining focused on its own restructuring process.
Henderson said in an oral testimony that GM plans to develop a profitable business plan comprising between 3,500 and 3,800 dealers across the United States that would support the company’s growth in the post-bankruptcy period. Furthermore, for dealers it would translate into more profits and the ability to attract and retain new consumers, Henderson explained.
“Our dealership consolidation is not just about saving money, but about creating opportunity and revenue growth. It's about our dealers augmenting our efforts to greatly enhance consumer perception in our products, brands and General Motors-directly and on a daily basis. That is why in every other aspect of retail business-from Harley Davidson, to the Apple stores and yes, Toyota and Honda, you see the premium that is placed on creating a distinct, consistent and topnotch retail experience,” he said.
“Even with these cutbacks GM will still have the largest dealer network in the country - more than any of our competitors. In our case, around 3,600 v. Toyota's 1,200. This would include an extensive rural network of 1,500 dealers nationally...in markets where we hold, on average, more than a 10 point advantage in market share.”