More questions than answers

Emotions still ran high when Oldsmobile dealers met at the NADA Convention's only single-division General Motors Corp. franchise meeting.

Despite GM's efforts to offer what the corporation considers fair compensation to its Oldsmobile retailers who will lose their Olds franchise when the division phases out, dealers still were upset and in some cases confused.

“They don't know what they're doing,” says George Lupica, president of C&D Chevrolet-Oldsmobile in Mt. Gilead, OH. “They don't know how long they're going to keep it. I'll let my son worry about it.”

The 25-year Olds dealer says he may get another GM franchise or “I'll just have to look for a new way of making money.”

“People were asking questions that we didn't have answers to,” says Bill Lovejoy, GM's sales, service and marketing vice president.

He added that the division could remain in business for four to six years and that it's too early to say how many dealers will be able to acquire additional GM franchises.

Darwin Clark, GM vice president of industry and dealer relations says, “There's a high level of comfort, but there's still angst. This is a highly emotional situation.”

“There's a lot of frustration and anger,” says Ken Ross of Team Chevrolet-Oldsmobile-Cadillac-Hyundai in Vallejo, CA.

William Brum runs a Cadillac-Olds-Pontiac store in South Orange, NJ. Oldsmobile is 40% of his business. He says, “The company has been flexible to address some issues. There was a concession on the rent factor. There'll be slightly more money for everyone.”

Mr. Brum doesn't expect to get another GM franchise due to the concentration of dealers in his area. “We plan to stay in contact with our customers not only for service, but to transition them into our other products,” he says.

Wes Rydell, who has eight Olds stores in the upper Midwest and in California, says, “I believe what they're offering is fair. Not generous, but fair. I think it's going fairly well, but it's frustrating. It's like when someone dies; it ain't fair.”

In addition to dealer reaction to the compensation package offered, the retailers coming out of the closed-door franchise meeting weren't shy about discussing the decision itself and the reasons behind it.

“The decision to cancel Oldsmobile was a terrible one,” says Dennis Schlueter, Schlueter Chevrolet-Oldsmobile in Waterloo, Ontario, Canada. “It's a good product.”

John Deery, Sr., a dealer from Cedar Falls, IA, who sells all GM brands and several imports, says, “It was bad management a few years ago.”

Mr. Deery's son, Brad, continues, “They tried to duplicate Saturn and it didn't work for Olds.”

Since the moribund announcement, sales have been up, bolstered by aggressive consumer and salesperson incentives.

“Sales have been fantastic with the increased warranty, incentives and incentives for sales people,” says Brad Deery.

“December and January sales were very good,” reports Mr. Lovejoy. “We will moderate incentives and go away from leasing. We'll do more with (lower) APRs.”

Despite the feeling that they won't get what they feel is a fair shake from the automaker for their franchise, some Olds dealers still are faithful to General Motors.

Shannon Nill, an Olds dealer from Junction City, OK, says, “I actually have faith in General Motors. We're going to stick with it.”

With the increase in sales since the announcement, some dealers thought the decision to drop Oldsmobile might be reconsidered.

“We told them that it's a decision that's not going to be reversed, not going to be revisited,” says Mr. Lovejoy.

GM told the franchise meeting audience that about 300 Olds dealers had agreed to a settlement.

But many dealers, urged by their attorneys not to rush into financial arrangements that might be boosted later, are waiting and seeing.

“I have Nissan as a second brand,” says dealer Alan Kurth of Minot, ND. “But Olds is still strong for us and I'm not sure GM's offer relects that factor. All other GM brands are covered in my market, and losing Olds leaves me with a single brand and half a business.”

Most embittered among Olds dealers are those who recently built new dealership structures or undertook extensive renovations or had signed five-year franchise renewal agreements.

“My dad and I extensively renovated our building in accordance with GM 2000 — and we have loads of loyal Olds customers,” says George Glassman, owner of Glassman Olds-Saab-Suzuki in Southfield, MI. “It's a crying shame. No amount of money is going to replace what could have been with the right approach.”