Closing auto dealers: Dumb move

[goof2]

Originally Posted by pauldun170

Its called litigation.
Dealer sued
politicians screamed

There are probably some cases where dealers got there shit together and improved their scorecards but a lot of cases are dealerships calling lawyers.

Actually it was arbitration not litigation, but you have hit on wher GM sees the value of keeping them open.

Originally Posted by pauldun170

What should GM be doing to be viable?

In my view the most important thing they need to do is scrap their labor agreements. As I understand it they have only dealt with pensions so far. That they dealt with them by giving the UAW pension fund 17.5% ownership doesn't make this likely. This is also the primary reason why I don't see the new GM as viable in the long term.

They also definately need to improve their quality. This avoids warranty claims which directly cost them money. It sounds nice that domestic manufacturers are touting their reductions in warranty claim expenses from the first 90 days of ownership. It is not so nice that those reductions track with similar reductions in new car sales. Quality goes beyond those direct costs though. The high NVH levels I have experienced in domestic cars will not result in warranty claims, but I have to wonder how manufacturers in the 21st century can find it acceptable. Practically every domestic I have been in, including newer cars, has NVH levels that you don't find in a 100k mile Honda or Toyota. In my experience domestics also have an annoying level of squeaks and rattles that aren't found in most foreign vehicles. Sure, the new GM is talking about increasing quality, but so was the old GM. They need to actually do it, not just talk about it.

The argument goes back and forth on this one but I think they should rely less on outside suppliers. Bringing more production inside would allow them to cut costs and put them in a better position to control quality. That does depend on GM actually controlling quality which, as I stated above, I need to see in order to believe.

That is just a sampling but compared to those three issues, which I am not conviced have been fixed, their dealership structure is a drop in the bucket.