GM wants to consolidate its eight automotive brands into urban megastores. According to Automotive News [AN, sub], Marketing Maven Mark LaNeve even has a name for these Buick, Pontiac, Saturn, GMC, Cadillac, Hummer, Saab and Chevrolet megastores: "GM Collections." Apparently, the concept would help GM to "maintain a high profile in cities where real estate is costly." To that end, dealers would be encouraged to move service and parts operations to "satellite centers." Ya think? To represent, a GM megadealer would need at least 49 demo vehicles. And then there's all the pickup truck variants. Even without considering exterior colors or option packages, that's a lot of choice. Too much? Not according to AN writer Jamie Larau. "The superstore approach likely would make GM brands more attractive to big dealer groups such as AutoNation Inc. and Sonic Automotive Inc." (Maybe he should have asked them.) And what of GM's divisions' brand weaknesses, and the obvious product overlap? [crickets chirping] Folks, arguments can (and will) be made for this idea, but there's a compound word for the concept, and the first part of it is "cluster."

The Detroit News' story on Rick Wagoner's recently professed intention to continue consolidating Buick, GMC and Pontiac dealers is straightforward to the point of wondering why the Hell they bothered. GM's got too many dealers (14,118). Wagoner wants to trim the network. This is news? Alright then, we'll play. Given that all GM dealers are protected by their state's franchise laws, how exactly is Wagoner going to git 'er done? Is the General going to spend [some more of the bank's] billions and buy-out stand alone dealers? Are they going to swing their ax and defend their position in court? Or are they simply going to continue starving Buick/Saab/Hummer/Pontiac of killer product until the brands die of natural causes– or just long enough to force them to consolidate and then turn the models into variations of a single brand? Three brands? Four brands? Inquiring minds want to know! The closest scribe Sharon Terlep comes to providing an answer. ""We do it one and two at a time," GM Marketing Maven Mark LaNeve told her of the consolidations. "Every situation is unique." So now we know.

GM's come-up with a new use for OnStar: collecting data on test mules. The Detroit News reports that The General racked up 1m miles testing the Lambda CUVS and collected the test data via telemetrics. Since OnStar can't tell them when a body panel's buzzing or note that a radio knob just fell off, they also collect data from dealers. That's how they found out the Malibu's hazard light switch wouldn't pop out like it was supposed to; which resulted in an "engineering analysis" of the problem and an "engineering tool change." Perhaps they should do an engineering analysis of their PR department too. In the same article, the DetN also reports GM "has added a shift at its Lake Orion plant to build more" Malibus to meet demand. And this right after they attributed the shortage of Malibus to problems with their part supply chain. Looks like someone needs to get their story straight.

Yesterday, we took a "Whose Fault Is It Anyway?" look at consumers who used carmaker's easy credit to buy (in the ironic sense of that word) vehicles they couldn't afford. Today, the San Antonio Business Journal reports that The Alamo City guv'mint has teamed-up with Ford "to make it easier for more working individuals and families to buy a new or used car." Here's the deal: low income buyers save up $1000. FoMoCo and San Antonio's Department of Community Initiatives match the buyer's grand with two more, creating a $3k down-payment towards a new or used vehicle from one of eight participating Ford or Mercury (!) dealers. To qualify for the "down payment assistance program" the buyer's income must not exceed 300 percent of the federal poverty level (that's $61,950 for a family of four). Applicants must also be a San Antonio resident, an insurable driver, not have declared bankruptcy within the last seven years and be "current" with all creditors. (Driver's license?) Oh, and they have to qualify for financing. Welcome to America! 

The Lansing State Journal reveals the reason Buick Enclave and Chevrolet Malibu sales are stuck in second gear: parts. According to Gary Cowger, GM's group vice president of global manufacturing and labor, "a lack of components" underpins this December's decision to shut down a third shift at Lansing Delta Township factory. "Even if that had kept running, we still wouldn't have been able to make more Enclaves." What's more… "As you know, we put that third shift on for a while to try to ramp up. But at the tooling rates of the supplier base, you'd have to buy another set of vendor tools (to make more parts) and that takes time. We're maxed out from a tooling standpoint." Cowger also implied that the Chevrolet Malibu drought is down to the same parts problem. "What we're doing right now with the Enclave and CTS and (Chevrolet) Malibu is doing a very detailed analysis of the bottlenecks in the supplier community so you can invest in the right tool sets out there and increase the capacity of that product at the plant." Cowger admits GM underestimated demand for all three cars, but said it's "a good thing." Try telling that to the 1000 GM workers who got laid off, or the GM dealers desperate for product to sell. Oh and don't think we've forgotten that back in October, when GM announced they were shutting down the third shift, they told the LSJ they "eliminated the third shift to keep from overproducing the crossover vehicles made there." I wonder why they didn't bring up the parts issue then? [thanks to Sparky for the tip]

If you write for WardsAuto, you know the vast majority of the people reading your bon mots are car dealers. So you can't come out and say "you greedy bunch of bastards are responsible for getting people into cars they can't afford, which is about to turn around and bite you in the ass big time." On the other hand, you can't come out and say "consumers are stupid morons who deserve what they get when they get in over their heads on a new car and can't get the Hell out." Consumers are customers, after all. For an example of how to play it straight down the middle, alienating both camps, I recommend you click on Steve Finaly's latest editorial "The Dealer Made Me Do It," riffing on the LA Times article “New Cars That Are Fully Loaded – With Debt” (blogged on TTAC here). "First off, I’m not excusing auto dealers. Or lenders. They have a moral and business responsibility to try to stop their customers from doing something stupid, such as buying a vehicle with a sticker price that will stick them with an oppressive debt… But so many consumers today buy too much vehicle. Then, when the financial squeeze becomes eye-popping, they look for someone to blame. The dealership and lender make nice targets. Seldom do the debt-ridden blame themselves." Well, why would they? 

When it comes to trimming Chrysler's bloated dealer network, spokesman Jason Vines knows the score. Join the club. Every industry analyst worth his TTAC bookmark understands that the American automaker would be in much better shape if it "downsized" its franchised dealer network. To put numbers to it, Chrysler has around 3700 dealers. Toyota has roughly 1700. According to the Detroit Free Press, Chrysler's overdealeritis leads to "inefficiencies" and "competition among themselves." Yes, but– as we've reported before, a 50-state patchwork of dealer-friendly franchise laws makes any move to terminate dealers [with extreme prejudice] a legal mine field. Fighting the dealers in court– or buying out them out– would cost billions. Even so, rumors are circulating that Chrysler is about to grasp the proverbial nettle, take cars away from Dodge and lop off a thousand stores. Vines acknowledged the wisdom of the idea, then clicked on over it itaintgonnahappen.com: "There is no way on God's green earth to get down to that number," Vines said. I guess Chrysler dealers better hope that the Talking Heads were right: Heaven is a place where nothing ever happens.

Even as Chrysler talks of cutting models, closing dealerships and ramming through a new contract with the United Auto Workers, their dealers claim they're hopeful about their future. This according to USA Today, whose reporter attended a no-holds-barred meeting in Las Vegas earlier this month between 75 percent of Chrysler's dealers and the automaker's top brass. Specifically, Chrysler CEO Robert Nardelli and Toyota renegades VP Jim Press and Marketing Maven Deborah Wahl Meyer (Tom LaSorda must have been busy with union negotiations) held an open mic Q&A session with the front line troops. Dealers says they came away feeling that, for the first time in years, someone at headquarters is listening to them. Chrysler's dealer council member John Schenden was ecstatic. "As a dealer body, we are more optimistic than we've been in the last 20 years." Reflecting his newfound confidence, Schenden recently bought land to expand his dealership. I guess he hasn't seen TTAC's TWAT nominations yet.

Want to attract buyers to your dealership? Diversify. No, we're not talking about offering several car brands. We're looking at dealerships with a restaurant, boutique, gym and/or spa attached. The New York Times reports on the trend, including a Bentley dealership that's building a V.I.P lounge for their top 250 customers, replete with private wine lockers and humidors. (They also rent out their showroom for weddings and social events.) The pomp and pampering don't carry much weight with some customers. As one BMW customer put it, "It's more for show. If you don't get good service, it doesn't matter what amenities you have." Yes, well, think of the possibilities should this trend filter down to the mainstream brands: McDonalds in Chevy dealerships, Victoria's Secret lingerie shows in Ford stores (might as well), and assisted living condos attached to Buick stores.

Chris Bangle isn't the only one in the auto industry who could use some sensitivity training. Adweek's Marketing y Medios reports that a Georgetown, Texas Ford Lincoln-Mercury dealership stepped in it big time. Mac Haik Ford Lincoln-Mercury emailed an ad to 1200 customers with the headline "Tired of Wet Backs?" The ad was a promotion for vehicles with air-conditioned seats. Geddit? Suffice it to say, the pun didn't go over too well with the area's Hispanic population. The dealership issued an apology for the incident and fired the general sales manager who produced the ad. Their general manager promises that no ads will go out until they've been reviewed by several managers, including himself. I guess he took the old Spanish saying "A palabras necias, oidos sordos" a bit too literally. 

The Kansas City Star reports that sluggish sales of Ford's former cash cow, the F-150 pickup truck, have led to a dramatic production slow-down. For two weeks in October, FoMoCo will idle half their operations at the pickup-producing Claycomo plant. Some 2100 (of 4400) hourly employees will be paid for doing naught. And thanks to "competitive operating agreements" negotiated with the United Auto Workers, returning employees will work 10-hour shifts for four weekdays with Fridays off. Currently, Ford dealers are holding 185,400 F-series trucks in their lots, which represents a 72-day inventory. (This after Ford's Norfolk F-150 plant was permanently shuttered last year.) Hot on the heels of GM's pickup truck pull-back (now a full stop, obviously), the F-150 slowdown is more proof that the entire pickup segment is undergoing a radical contraction. The trend will hit The Big 2.8's bottom lines but good.   

An agreement between Massachusetts auto dealer Ernie Boch Jr. and a disabled driver could impact dealerships across the country. BostonNOW reports that a wheelchair-bound customer asked one of Ernie's salesmen to install temporary hand controls so she could test drive a car. The dealership refused. The customer filed a complaint under the Americans with Disabilities Act (ADA), stating the dealership refused to offer "reasonable accommodation" as required by the law. Nine months later, the customer dropped her complaint; the dealership agreed to purchase temporary hand controls to accommodate disabled customers. "I didn't realize how many people actually needed [hand controls]," Ernie demurred. "I don't think I placed any importance on it at first." All eight of Ernie's stores will now make the controls available to disabled drivers. Other dealers will probably follow [law] suit.

The financial press [and TTAC] has had its say about ex-Home Depot CEO Robert Nardelli's ascension to Chrysler's throne. The general consensus: there's gonna be some major ass kicking in Auburn Hills. But what do Chrysler dealers think of the executive who never met a problem that he couldn't sic Six Sigma upon? Dealer Magazine surveyed Chrysler stores around the country, asking owners for their thoughts on Boot'em Bob. Obviously, the results were carefully edited and selected to represent a wide range of opinions (lest anyone think Chrysler dealers have an adversarial relationship with the company that turned channel stuffing into an art form, dreams of culling them like an African game keeper facing a plague of elephants and restricted access to the corporation's used car inventory). We get the expected "we are hopeful" and "it's too early to tell." And then… "There are too many name plates in the Chrysler Jeep Dodge lines, many of which are in direct competition with each other. How would Chrysler Corp look if Chrysler were the car line, Dodge the truck line, and Jeep the SUV line?" "Nardelli may be capable in GE or Home Depot areas but the auto biz is a whole different game." "The first thing to do is make products that people truly want to own." I guess they told him. 

The Automotive Aftermarket Industry Association (AAIA) says they've added four more co-sponsors to the Motor Vehicle Owners' Right to Repair Act of 2007 (H.R. 2694). The four Dems (Howard Berman of CA, Alcee Hastings of FL, Donald Payne of NJ and Albert Russell Wynn of MD) bring the total number of lawmakers lining-up behind the legislation to 24. The Act would require all automakers operating in these United States to provide "full access to all tools and service information needed to repair motor vehicles to independent repair shops." In other words, automakers couldn't use proprietary software to lock out independent mechanics, ratchet up repair rates and endear themselves to franchised dealers for all time. In case you thought this was strictly a Davis vs. Goliath kinda deal, the bill serves-up a carrot with that stick. Car companies get "strong protections for their trade secrets unless that information is provided to the franchised new car dealers."