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MY OBSERVATIONS of GM USA and GMH and the way they have operated in the past 10 years is that they are a totally different company to the one whose outstanding values I was trained in and always admired and respected so much.

Likewise my father who started the same year GM commenced in Australia in 1926 and sat around our family table extolling the virtues and pride he had in working for this great company.

Between my father 1926-1968 and myself in various internal and external Holden roles from 1963-2014, a connection spanning nearly 90 years hopefully allows me to make some comments on the recent withdrawal of GM from Australia/NZ and the unfortunate flow on disputes between GM and its 180 plus dealers.

In 40 years of involvement with the GMH dealer organization, and the past 10 years since stepping back from direct involvement, I can state positively that dealers have in all this time not changed in any way.

But in this same past 10 years, car company leaders and representatives who interface with the dealers have changed the profile of the car dealer over my entire journey and have never varied their personality, character, entrepreneurial spirit and innate trading flair.

Car dealers are authentic individual business people and what you see is what you get. So many Holden dealers are second or third generation where the superb GM training was imbued into their business psyche and passed down from the founding grandfather to sons and daughters of my era and in the last decade to grandsons/granddaughters.

Dealers have always had a long term commitment to the franchise and always sought to embrace family progression.

Up until 10 years ago the relationship between dealers and Holden was a true partnership where trust was the cornerstone and where win-win outcomes were always uppermost with both parties any time there were serious issues to be resolved.

I cannot ever recall in any dealings with the 250 dealers I had direct involvement with in my time, ever once reaching for a copy of the sales agreement/contract to see who was right or wrong. I can’t imagine this being the situation of recent times.

I shall never forget 12 years ago meeting with a senior Holden executive who told me the time had come to halt what he thought was the dealer body becoming too strong and dictating to Holden how the game should be played.

John Crennan

 

He made it clear he intended to change that perception and this is where I feel the change in dynamics of Holden and its dealer moved for the worse . In my role at HSV at that time, I did not see the dealers in this light. We had our differences on many issues but the cards were always face up on the table … but from time circa 2007 the relationship/ partnership between Holden and dealers seemed to gradually take on a different feel.

Dealers sensed the Car Co people began to begrudge dealers making a profit and an unfortunate feeling of envy seemed to creep into the partnership mix.

In the past ten years GMH market share declined from 13% in 2010 to 4% last year. There have been seven different CEOs at Holden. This was a bad look and for me was a major factor in Holden losing their historic brand identity and sales momentum.

If a major owner/dealer were to have seven different general managers, and during this time displayed a scoreboard of serious declining sales, Holden would certainly be having plenty to say to the dealer.

My contact with many dealers from all franchises over the past 10 years as an industry observer, has seen them bemoan both the standard of representation of the car company executives, their lack of genuine feel and understanding of the retail/dealer side of the industry and their short term come and go tenure in the company.

One recent example was a car company executive who insisted dealers construct five metre high ceilings in the showroom with some dealers made to comply with this big investment. A short time thereafter this person resigned and left the industry.

Another separate franchise was insisting dealers do showroom floor makeovers and it was non-negotiable that the tiles be sourced from Italy. This is not how a partnership should operate. (these were not Holden people).

Car company executives charged with working closely with the dealers (of which I was one) could, every night, put their head on the pillow and sleep without financial concern for themselves or their organization – unlike the car dealer where their risks were significant given massive loans and floor plan costs to service and large capex requirements from constant car company facility upgrade requirements and have everything on the line with bank guarantees over their house and other assets.

When dealers and Holden worked with a spirit of an equal partnership and directed all their combined energies to the most important part of the car industry, and that being caring for the customer,  everyone was a winner.

The best words you could ever hear a dealer utter would be “HE IS A GREAT DEALER BLOKE”. Great dealer blokes were, up until 10 years ago the rule. Today they are the exception.

However the feedback I get is that Toyota still has Great Dealer Blokes working with their dealers who ‘get it’. Maybe this is a reason why their performance in the market last year (and consistently for many years now) with sales of 207,000 vehicles and light years to No 2 in the market with Mazda on 98,000 sales.

In the 70s 80s 90s you would not get any argument from a dealer that the motivation and assistance and brilliant working relationship between Holden and its dealers would be worth an incremental five percent market share for Holden.

It seems a no brainer that the Government must now intervene and establish legislative processes to avoid a recurrence of the past unpleasant four months disputation between dealers and GM where the dealers felt powerless to challenge the compensation GM offered.

Such legislation will address ‘fixing the effect’ however I would equally like to see a massive industry wide plan to ‘fix the cause’ and get ‘Great Dealer People’ back into the car companies and restore confidence and a reset genuine uplifting partnership relationships.

Prioritising this retraining and people development process / focus is an easy win for the industry if they put their mind to it.

I do not wish to comment on the fairness or otherwise of the offer to the dealers and the final resolution as I am not across all the facts. I did however write in my AADA article in March, just after Holden announced their exit, that I hoped the withdrawal program would be conducted in an elegant and dignified manner befitting the incredible contribution GM had made to the car industry and hopefully establish a Heritage Centre at Fishermen’s Bend that captured the near 90 years of GM in this country.

I don’t buy the comments that they chased down every conceivable option to keep it afloat and GMs position that they were getting out of RHD cars which was a key factor in their exit.

You do not have to be a genius to work out that rather than giving no prior notice to Government, staff and dealers and unilaterally killing the business overnight and leaving all the stakeholders reeling with shock and dismay, that there were many better options.

One of these is why would GM when selling their RHD plants to other parties not have embedded into their sale contract to have these parties agree to continue supply of Trax, Equinox, Acadia and Colorado products for 3 years until the expiry of the dealer sales agreement and arrange a measured transparent phase out that allowed all stakeholders reasonable time and notice for an orderly exit?

Meanwhile, I cannot reconcile how GM could have been so audacious at the time of their exit announcement on February 17, in the same breath, as talking about the extinction of Holden, its products, its staff and its dealers, to suggest and make news around working on a GM niche vehicle rebirth in Australia.

It just does not make sense to me to have GM establish a small niche operation and have a new brand (already agreed upon) in GMSV and then soon after see senior executives who were overseeing the Holden exit program being linked to jump over and be part of this potential new company.

Even if a GMSV business model did have merit and some application in Australia, surely hitting the pause button for 12 months prior to floating the prospect of this new company at the Exit announcement would have been a more delicate and sensitive strategy.

By John Crennan

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