NADA Commends GM, Does Not Endorse Agreement

Following the agreement reached on Monday between General Motors and the National Automobile Dealers Association (NADA), the parties involved raced each other in issuing praising statements. According to the agreement signed yesterday, nearly 90 percent of dealers have signed or verbally agreed to the participation agreements.

As was to be expected, seeing most of its objectives achieved, NADA had a change of heart and issued a press release commending the Participation Letter Agreement and GM alike. Still, the association does not endorse the document. Before presenting you NADA's statement, we remind you that yesterday, prior to the signing of the Letter, GM outlined its plans to get rid of hundreds of Cadillac dealerships.

"Our current footprint of 1,400 Cadillac dealers, most of which are dualed, is out of sync with modern luxury automotive retail. Mercedes-Benz, BMW and Lexus outsell us with 250 and 450 dealers. We have to address this and enable our large Cadillac dealers to do more volume," Mark LaNeve, GM sales chief said yesterday.

As for NADA, below is their official response to the Participation Letter Agreement:

"The National Automobile Dealers Association (NADA) has reviewed and supports GM's amendments to the Participation Letter Agreement. We're especially pleased that GM moved so quickly to meet with NADA and the GM National Dealer Council on such short notice to review and to discuss the serious concerns that dealers had with the original agreement."

"I especially commend GM for its flexibility and its willingness to make substantive clarifications and modifications to address dealer concerns. We believe GM has made a very good faith effort, given the unprecedented circumstances facing GM and the industry." - NADA chairman John McEleney.

"While NADA is not in a position to formally endorse the Participation Agreement, we believe the revised document addresses the majority of dealer concerns."