My Life on the Dark Side

Breakfast with factory friends always includes a test of how far I've moved into the dark side — their measure of whether I'm no longer able to see things their way.

On this particular occasion, the question was whether dealers who suffered termination should be granted reinstatement under a theory that they cost the auto maker little or nothing and provide tremendous consumer benefit.

To auto makers, it seems repugnant that a dealer who was “awarded” a franchise may later argues that he has rights in a termination case.

Dealers who argue that they prepay virtually everything from inventory to warranty service are firebrands.

The counter weight to dealers' belief in the value of individuality is that dealers are not encouraged to think outside the box. In fact, they're often punished for daring to speak new thoughts out loud.

Not only is individualism shunned, factory men are worn to the point of exhaustion with pretending to care about all the new marketing ideas that clever dealers thrust on them expecting thunderous applause, eternal gratitude, and what's worse, immediate assistance.

Fatigue is what franchisors feel when pressured by dealers to value things that are not on their lists of goals and objectives. It's easy to spot fatigue in the attitude that comes at you when you ask a zone manager for a special allocation or in the tone your floorplan lender takes when cash is tight and you need a friend

Everyone loved dealer creativity when getting things done required testing boundaries but in this mature market dealer inventiveness drains them.

Behind closed doors manufacturers want dealers to just shut up and carry big inventories in palatial facilities with tightfisted warranty centers.

Let's not forget that in factory-speak, your future exists because their brand was entrusted to you by a benevolent franchisor. The deal they intended did not include a right to resist brand attributes simply because they were outside of your capabilities or profit needs.

Whether or not a dealer can use the brand to make money is not a manufacturer's first concern nor was it ever the reason the manufacturer awarded a dealer in the first place.

It's easy to understand all of this from the manufacturer's perspective, but why in the world do dealers line up to be kicked around this way?

The answer is that in the same way dealers consider themselves unique, they find it easy to distance themselves from those who are currently on the outs with their manufacturers.

So, the termination of a neighbor's store is understandable, but the loss of your store is an outrageous confiscation.

Manufacturers encourage us to think this way, justifying their war on unwanted dealerships as no one's fault, just that darn over-dealering thing that's killing us all.

I've come to learn that over-dealering is really code for “not my fault.” It is a justification allowing manufacturers to take back their promises.

Perhaps it is not important that no one can demonstrate exactly why privately funded dealerships are such a burden on auto makers.

I know that excess dealerships do add staffing cost for the manufacturer and too that redundant dealers may be linked to higher transactional pricing. However, the mitigant to a high dealer count is dealer service and consumer convenience.

America's retail landscape is thick with stores that produce sales volume at premium prices in exchange for shopping convenience. Consumers happily pay those premiums for service especially where ease is further advantaged by better guidance and a more relaxed atmosphere.

Why are certain manufacturers ignoring the obvious advantage of deeply rooted and fiercely loyal retail distribution, choosing instead to blame their sales declines on so-called over-dealering?

It's because dealers were an easy scapegoat when the alternative was for auto executives to fall on the sword of ineptitude. I suppose I really do live on the dark side of auto retailing after all.

Peter Brandow is a veteran of auto retailing.

Questions or comments about this column?
Send us an e-mail at [email protected].