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Published: Friday, 10/16/2009

GM slashes Cadillac dealers

BY GARY T. PAKULSKI
BLADE BUSINESS WRITER

Cadillacs soon will be unavailable in pink and every other color in Bryan and hundreds of other small towns across the nation.

In an attempt to make the dealer network of the brand more like that of luxury competitors, owner General Motors Co. is withdrawing the vehicle from small dealerships with few sales to focus on medium-sized and large cities with more affluent residents.

"It's really too bad," said Stephen Taylor, owner of Taylor Cadillac along the Central Avenue Strip in Sylvania Township. "But there were too many dealers."

The number of Cadillac dealers will be trimmed to 400 from 1,500, he said.

Mr. Taylor will be one of just three Cadillac dealers in northwest Ohio along with dealers in Findlay and Sandusky, according to dealers being eliminated.

Across northwest Ohio and southeast Michigan, at least seven dealers will have to stop selling Cadillacs, The Blade has learned. Most are in small towns.

Three area GM dealers, including Ed Schmidt Chevrolet on South Reynolds Road along the Toledo-Maumee border, won't be permitted to sell new Chevrolet models as the carmaker winnows its dealer network, the Web site truthaboutcars reported.

A spokesman for the Schmidt dealership declined to comment because of a confidentiality agreement with GM. The other two area Chevy dealers confirmed their loss of the franchise.

A spokesman for GM declined comment about the Internet report but acknowledged that the firm is pursuing a new strategy for Cadillac. Tom Wilkinson described it as a "transition to a dealer network that looks more like a Mercedes, BMW, or Lexus."

The move will boost sales and profitability of remaining dealers, which will permit them to improve service and showrooms to a level "that luxury customers need and expect," he said.

He said the change will be difficult for dealers, but said it is necessary for GM "to survive and become healthy again."

Dealers affected will be allowed to sell remaining 2009 models and perform routine service on Cadillacs through next October. After that, GM said it will permit them to do warranty work only when customers would be "greatly inconvenienced" by traveling to the nearest remaining dealer.

But axed dealers aren't permitted to order 2010 Cadillac models, the company and dealers said.

Most of the dealers sell other brands, so they are not facing closure.

"GM says our town is not the size they want for a Cadillac dealer," said Roger McClain, general manager of Lima Auto Mall in Lima.

Founders of the dealership, which began under a different name, started selling Cadillacs in 1910 and until 1959 handled distribution of the models to dealers in a 30-mile radius, he said.

"It's foolish for GM not to let us buy 2010 models," he said. "I have customers who want to buy them from me."

But Mr. Taylor of Toledo's Taylor Cadillac said 750 of the dealers being eliminated sold 15 or fewer Cadillacs annually. He sells about 500 new and used models each year and predicted that his sales could double with the reduction in dealerships.

Employees at other dealerships that are losing GM models had varying responses to the situation.

"We aren't excited to lose Cadillac, but it isn't anything earth-shattering for us," said Eddie Jewell, general manager of Landmark Chevrolet-Buick in Bryan.

Sales of the vehicles have been declining for a decade, he said. He blames the situation in part on the decline of the carmaker's leasing program. "GM made it obvious to us they wanted to have more of a 'metro' kind of a deal," he said. "They want to have stand-alone facilities and to compete with the other luxury brands."

Matt Bell, owner of Greg Bell Chevrolet in Adrian, continues to sell Chevrolets but is in the "wind-down phase" of Cadillac sales, he said.

Boomer Chapman of Frank Beck Chevrolet-Cadillac Co. in Hillsdale confirmed that the dealership will lose its Cadillac franchise. "GM is trying to move Cadillacs to hub cities," he said. The dealership will continue to sell Chevrolet models and used vehicles.

Buck Baumann of Baumann Auto Mall in Port Clinton said Cadillac will be the third GM brand lost by his dealership. Pontiac is being discontinued, he noted, and Oldsmobile was dropped several years ago.

Warner Chevrolet in Tiffin, which was set to lose both Chevrolet and Cadillac, closed Oct. 2 because of insufficient sales, said a woman who answered the phone at the business. She declined to give her name.

Eisenhour Motor Sales in Pemberville previously confirmed that GM was eliminating Chevrolet sales there.

Steinle Oldsmobile in Fremont will be left with only GMC Trucks when it loses Cadillac and Pontiac models. The firm hopes to convince GM to let the dealership sell Buick models.

"That would be enough to survive," said salesman Bob Hammersmith.

Contact Gary Pakulski at:

gpakulski@theblade.com

or 419-724-6082.



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