Manufacturers, dealers enter new era of harmony

NEW ORLEANS — Dealers and manufacturers are embarking on what one auto executive deemed “a new era of harmony,” in contrast to the discord that has slipped into their relationships in recent times.

“We need to sweep out our old negative attitudes and usher in a new positive spirit of cooperation. The stakes are big but so are the rewards,” says Jim Press, chief operating officer for Toyota Motor Sales U.S.A. Inc., in a keynote speech to the 85th annual National Automobile Dealers Assn. Convention in January.

“I urge all manufacturers to work with NADA as a constructive partner to improve dealer relations,” says Press. “And I pledge that Toyota will be a leader in those efforts.”

Bill Lovejoy, General Motors Corp. group vice president for sales and marketing, says his GM's convention franchise meeting with dealers was “the best I've ever attended. Dealers are in a great mood.”

In contrast, GM dealers were in a bad mood at the 2000 NADA convention in Orlando. They were miffed at GM for a number of initiatives they saw as anti-dealer. Chief among them was the automaker's plan to buy and operate up to 800 dealerships. Dealers said that would make GM a competitor. GM executives traveled en masse to Orlando to tell dealers that, on second thought, it was a terrible idea, and that the program was being scuttled.

Since then, GM has made a concerted effort to improve its dealer relations. It seems to be working.

“It's a different company,” says William Bradshaw, a GM dealer from Greer, SC. “There's a huge difference at this convention compared to Orlando.”

Alan Starling, a Chevrolet and Oldsmobile dealer in St. Cloud, FL, says he was heartened to hear at the franchise meeting that GM is focusing much of its future efforts on product.

“It's extremely satisfying to hear that,” he says.

Dodge and Chrysler dealers last year were in a sour mood towards DaimlerChrysler's Chrysler Group which was reeling from profit losses and reacted by cutting back on dealer margins, incentives and lease programs.

But Dodge and Chrysler dealers left their NADA franchise meeting in fairly good spirits after hearing what the automaker's brass had to say.

“We've made a lot of progress from last year when things were heated,” says Kenneth Zangara, chairman of the Dodge Dealer Council.

He adds, “Everyone recognizes we were making progress. The manufacturer recognizes that they made a lot of mistakes on margin cuts and incentives, and they're trying to rectify that.”

He says Dodge dealers' biggest concern is that fresh, new product is in the pipeline. That includes more SUVs, according to Zangara.

He explains, “We have Durango. It's a great SUV, but Dodge needs a small one too. Dodge dealers have one SUV versus six for Toyota.”

Wes Lutz, a Dodge dealer in Jackson, MI, says he felt good coming out of the NADA franchise meeting, but added that Dodge needs some volume products, particularly a small SUV and an expanded truck line.

He says dealers were comfortable with the former Chrysler Group management team headed up by James Holden who lost his presidency job to Dieter Zetsche after all those losses in the last half of 2000.

“We knew and liked the old team,” says Lutz.

He says their successors seem competent enough “but we need to know them and they need to know us as dealers.”

Meanwhile, Ford seems to be on its way to mending relations with dealers. (See stories starting on page 12.)

Robert Maguire, 2001 NADA chairman, says of dealers, “Without a doubt our voice is being heard. Our goal is to convince the manufacturers that it is in everyone's best interest to discuss dealer policies with us before those policies are implemented.

“We have made great strides in that direction.”