Bill Lovejoy makes GM dealers happy

His reputation as a straight-shooter serves him well A year ago, the General Motors Corp. high command asked William J. Lovejoy to take a position tantamount to taking over Napoleon's troops at Waterloo. GM wanted the likeable New Yorker to replace Roy S. Roberts as vice president and group executive of the automaker's North American vehicle sales and service operations.

GM dealers were up in arms. The corporation had just aborted a plot to buy and operate up to 800 dealerships under something called General Motors Retail Holdings (GMRH). At the time, dealers hailed Mr. Lovejoy's appointment. They knew him from his days at the helm of General Motors Acceptance Corp. (GMAC) and GM Service Parts Operation (SPO).

By most accounts, Mr. Lovejoy has succeeded, mostly by communicating with dealers. The biggest problem with the GMRH plan, say observers, was that it came as a complete surprise to the GM dealer body.

"There were a lot of people who weren't happy at the time," recalls Michael P. Savoie, the second-generation owner of Mike Savoie Chevrolet in Troy, MI. "Nobody likes change and GM was changing so much and the communication fell off. Now, they communicate a lot. If they communicate, they'll get everything they ever wanted."

Mr. Savoie adds, "I was happy when he got that job. His reputation as a straight-shooter was pretty good. And he has done more in his short time in that job than anyone would have expected."

Communication was the first part of the manufacturer-dealer relationship that Mr. Lovejoy sought to fix.

"One of the first things I did was give my e-mail address to dealers, which I don't think is a rocket-science deal but evidently it surprised a lot of them," explains Mr. Lovejoy. "And I do get a lot of them writing me direct, particularly the smaller dealers."

He says he acts on each e-mail message, either with a response or by passing the message on to someone in the GM organization who can answer the question or solve the problem at hand.

"I've always made myself accessible at my GMAC job and the SPO job," Mr. Lovejoy says. He does this to allow dealers to vent and to learn where the "trigger points are."

"You're sitting on top of an organization and things get filtered as they come up to you," he says. "People are afraid to deliver bad news. When you give people free access, you wind up being aware of issues you never, ever, ever would have heard through the system. After a while, it's like a painting. You get a picture of what's going on."

Adding to the one-on-one communication is Mr. Lovejoy's outreach to the National Automobile Dealers Association and GM's national and regional dealer councils.

"I've had about five face-to-face meetings with NADA, plus as issues come up of any significant nature, we call the National Dealer Council and we talk to them first," Mr. Lovejoy says. "And then we call NADA before we release stuff to the dealer body that we consider is significant.

Regional dealer meetings have included presentations by either GM Chairman John F. Smith or CEO G. Richard Wagoner, North American President Ronald Zarella, and several other high-level executives. Representatives from GMAC and SPO also were involved in the regional dealer meetings.

"We try to say, `here's the whole business,'" says Mr. Lovejoy. "We never used to do that. Each division did its own thing and then GMAC did their thing and Service Parts did their thing."

Mr. Wagoner says Mr. Lovejoy "gets a lot of credit" for GM's improved relations with its dealers.

Mr. Wagoner explains, "Bill's a good dealer guy. He believes in the franchise system, and he's working hard. His primary job assignment has been to really integrate closely with the dealers and get the right kind of working relationship that we need."

One of the issues still facing Mr. Lovejoy concerns small dealers who can't get enough product to satisfy their customers.

"In our setup, we try to be more dealercentric," he explains. "You don't want one dealer to have to put in a $20 million facility for service, parts, sales and inventory; and then have another dealer who sells 25 vehicles a year be able to get as many of a particular product as a big guy. The only time you get into that situation is when demand exceeds supply."

"It looks to me that Mr. Lovejoy is more dealercentric," says Lomberto Perez, dealer principal at AutoCity Buick-Pontiac-GMC in Homestead, FL. "GM realizes that it's not going to be able to sell directly to the customers, and that it's going to need the dealers.

Mr. Perez adds, "There is more emphasis on making sure the dealers know what's going on. He's getting a lot more input from dealers. We're going forward in a positive way."

Mr. Lovejoy also gets input from a group of about 15 dealers that he calls an advisory forum.

"I go off-site with them for a day and a half every three months with my team. And it's no holds barred," he explains. "This is talking through issues, throwing things on the table, getting their reaction. And quite frankly when these guys tell us how dumb we are or this is stupid or this doesn't stand a chance of working, we don't go any farther."

Once he gets a blessing from this group he goes to the National Dealer Council. "If they say it's dumb, we throw it away then."

Mr. Lovejoy says the expansion of the GM Buypower Internet site and the GM Certified used-vehicle programs came from the advisory forum. The group also helped stop the Drivers Site Internet used-car experiment in Texas.

Other issues on the table include computer systems, Internet pricing and GM's controversial Vehicle Order Management System (VOMS).

Mr. Lovejoy understands that he's never going to be able to please all of the dealers all of the time.

He says, "When I told them we're going to be dealer-centric rather than consumercentric, I made a lot of dealers happy, but I made some dealers unhappy. My feeling is all you have to do is tell them the truth, and why you're doing things. They don't always have to agree."

Mr. Lovejoy also uses satellite broadcasts, video tapes and a magazine called Edge to communicate with GM dealers. "We probably over communicate," he chuckles.

Communication, while important, isn't the only change Mr. Lovejoy has made in his year in the hot seat. He's decided to use only the NADA's dealer survey to determine where the corporation stands.

"In the past, if we did a survey and didn't like the results, we commissioned another one," he recalls. "If we didn't like that one, we commissioned another one."

GMRH wasn't the only wound Mr. Lovejoy needed to treat when he came on the scene last February. GM dealers still were reeling from the consolidation and reorganization of the manufacturer's field operations. After the reorganization, 75% of the GM field people changed, which caused uneasiness among dealers.

"What we really didn't understand were the complications of having one market area management (MAM) team handling six different franchisees, having the product knowledge they need and being able to work programs," Mr. Lovejoy admits. This year, the reorganization will be "tweaked."

"We are going to align by channel as best we can," he explains. "If a city has a bunch of stand-alone Chevrolet dealers, we'll put together a MAM team with just Chevrolet dealers. If you have another area with just Pontiac-GMC dealers that can support a MAM team, we'll put in one for Pontiac-GMC."

Although most GM dealers seem pleased with Mr. Lovejoy's performance to date, others still maintain a wait-and-see posture.

"It's probably better than it was," says Chuck Frank of Z. Frank Chevrolet in Chicago. "And we haven't seen too many draconian initiatives since then. And they seem to be talking nicer. But overall, I don't see a whole lot of change."

Still, Mr. Frank holds out hope. "He has a good reputation as someone who listens and someone who cares about the dealers. That goes a long way."

It comes down to personal relationships, says Mr. Lovejoy, which is why he focuses on communications.

"I am a strong believer in relationships," he says. "Nobody will pay you far more than you're worth because of a relationship, but what they will do because of a relationship is stretch a little harder. And if you have a relationship, they will cut you slack when you fall down. And guess what, we all fall down occasionally."