A recent article in Automotive News about Norman Braman’s law suit against General Motors and their EBE program only emphasizes that the timetable for NADA's task force on facility issues and multi-tier pricing needs to be sooner rather than later with regard to the facilities issue. While the article suggests that the Braman suit could be a test case on the legality of manufacturer facility programs that reward participating dealerships with volume-based incentives, the issue will be settled for GM dealers long before this case comes to trial (if it ever does) 15 months from now. I assume General Motors knows that and is procrastinating the litigation of this issue as long as they can.
General Motors has been the focus of most of the comments in this space with regard to facilities programs. While I recognize that other manufacturers have facilities programs, GM’s EBE is, by most accounts, the most egregious and casts the longest shadow in our state. The feeling at NADA is that most of the other manufacturers are standing on the sidelines watching how EBE unfolds and will then follow in GM’s footprints.
Meanwhile, the NADA task force needs to firmly apply the "pedal to the metal" as GM dealers are facing very difficult decisions on their facilities each day. They do not have time to wait for the outcome of Braman's suit.
(By the way, is Braman's real full name "Billionaire megadealer Norman Braman"? It seems that is the case if you were to read Automotive News. Just wondering...)
The task force will have a couple of very significant meetings the first week of August. The GM dealers on the task force will be meeting in Detroit with Mark Reuss who is the President of General Motors North America. I look forward to the opportunity to visit with Mr. Reuss about the small dealers’ perspective.
Later that week, we will meet with our outside counsel in Washington on both the facility programs and multi-tier pricing issues. I hope we can make some progress at these meetings. Stay tuned for details!
Report: Employment at New-Car Dealerships Up 4.6% in 2011
Even though, according to one small business expert, if you've got a business - you didn't build that and somebody else made that happen, car dealerships are setting the pace across South Dakota and America when it comes to new hiring around the country. It seems that this hiring in dealerships is happening despite what our government is doing rather than because of what they are doing. I think most dealers are very nervous about what happens in the beltway.
There were 933,500 workers employed at U.S. new-car and -truck dealerships in 2011, a 4.6 percent increase from the previous year, said Paul Taylor, NADA chief economist. The findings were released as part of NADA Data 2012, the association’s latest state-of-the-industry report on dealership financial trends. The increase in the number of employees occurred as the number of dealerships, which had declined in recent years, continued to stabilize. In the first quarter of 2012, there was an increase of 66 dealerships on a net basis. “The arrival of new brands and new dealerships is a sign that even more vigorous competition is on the way in the U.S. vehicle marketplace,” Taylor said. “As new brands enter the U.S. market, the net dealership count may increase in future years of strong economic growth.”
In 2011, the average new-car dealership employed 53 workers and had an annual payroll of $2.6 million. Dealerships also provided an average 14.5 percent of total retail payroll in their states in 2011. Taylor also noted that “franchised dealers are major employers as well as significant contributors to their communities’ economies, tax bases and civic and charitable organizations.”
Wow! Really Mr. President?!
You didn't get there on your own. I'm always struck by people who think, well, it must be because I was just so smart. - Barrack Obama 7/13/2012
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