He defines the background:
For many years, GM dealers have, through sound business practices, made fortunes for themselves and their families. During this period, the anything but professional grade people at GM have watched the dealers thrive while they frittered away the revenue at their end through sloth and ineptitude. Up to now the GM management philosophy has been “God will provide.”
They are wrong. God does not reward sloth and ineptitude. General Motors is in bankruptcy. It is now announcing a new dealership franchise model. These are the same people who brought the company to its current circumstances. They believe that the dealers have been stealing from them and that dealer opportunism is to blame for the current circumstances, not their stupidity.
So after blaming their employees, GM is turns to blame their next-least vulnerable partner: their dealers.
Richard, as usual, spells the challenge out clearly:
Will the GM dealers spot that this is what is in store for them? Will they just sign on the dotted line and march into franchise financial hell as did the franchisees of so many other franchise systems?
In the past, auto dealers were in a privileged position.
Now, unless they act, they’ll be just like the other pathetic business format franchisees that inhabit the twilight pizza, coffee and dog poo-picking up industries.
- This is precisely the challenge that the Canadian grocers failed at historically.
Without resistance, this fate is in store not only to GM and Chrysler, but to all of the auto dealers.
- Dealer opportunism (defined as self-interest with deceit) as the primary problem when compared to manufacturer/franchisor incompetence?
That the dealers let the public/shareholders believe this nonsense is beyond belief.