DETROIT: A National Automobile Dealers Association PR campaign has accomplished what few organizations have succeeded in doing over the years: it has made General Motors blink.
DETROIT: A National Automobile Dealers Association PR campaign has
accomplished what few organizations have succeeded in doing over the
years: it has made General Motors blink.
The campaign, devised to counteract GM’s recently stated desire to get
into the retail dealer business, paid off quickly, with GM almost
immediately rethinking its plans.
Intended to reduce distribution costs, the formation of General Motors
Retail Holdings would potentially have seen the automotive giant buying
up as many as 10% of its 7,700 authorized US franchises over the next 10
years. The move would likely have proven disastrous for NADA members
owning competing franchises, who would have had to battle with the GM
subsidiary for market share.
NADA’s PR campaign was remarkably simple. When rumblings about the
formation of GM’s retail group first surfaced during the summer, the
dealer organization communicated a list of eight areas of dealer concern
to the company. According to NADA president (and CA-based dealer of
Buick and import models) James Willingham, GM responded in September to
seven of the eight - but the eighth was the retail bombshell.
NADA quickly went public with its concerns. Willingham and NADA director
of media/ PR Michael Morrissey scheduled a lunch meeting with Detroit’s
powerful Automotive Press Association, during which Willingham departed
from his prepared remarks and lambasted GM’s plan to enter into
’competition with its own dealers.’ He hinted that dealers would be
forced to seek relief through new laws at the state level.
Print and radio stories about the proposed move forced the company’s
hand by creating awareness of the issue among GM execs not directly
involved in negotiations with the dealers. Last week, GM chairman and
CEO Jack Smith conceded defeat, telling the trade publication Automotive
News that the plan announced to dealers was ’quite premature.’
Still, the issue is far from resolved. Both Detroit’s auto makers and
their affiliated dealers recognize there are too many dealerships to
support sales levels, given the increasingly large share of the market
captured by import brands and new business methods, such as Internet
sales. NADA’s Willingham has suggested that GM tackle the problem on a
market-by-market basis in cooperation with dealers.