(1999-2000) The Rise and Fall of GM Retail Holdings;
GM Appoints 3rd Pontiac-Olds-GMC Dealer since 1988
General Motors refused to give up on attempting to dismantle my business with its attempts to induce me to trade my Buick franchise for Oldsmobile. In December 1999, Dan Meyer, the successor to Dave Bott, approached me with yet another absurd Buick/Olds Newark trade proposal, which I of course, rejected. At the time, reports of the imminent demise of Oldsmobile were widespread, and then exactly one year later on December 12, 2000, GM announced the closure of Oldsmobile Motor Division.
The rise and fall of General Motors Retail HoldingsIn the late 1990’s, GM and Ford initiated efforts to acquire retail dealerships, actions that were met with dealers’ pursuit of state laws outlawing such practice. In 1999, GM created GM Retail Holdings (GMRH) in order to own a number of GM dealerships across the United States. The September 28, 1999, GM announcement memo states in part, “GMRH plans to acquire a limited number of dealerships from willing sellers located in the top 130 retail markets.” GM Vice President Darwin Clark was named as Chief Executive Officer of GMRH. It seems apparent that this initiative was a national formalization of GM’s pilot program in California’s San Fernando Valley. The Newark, California, pilot program differed in that GM implemented it despite a lack of willing sellers.
Upon the announcement of GMRH, GM dealers universally became immediately outraged. The anger was so intense that Darwin Clark made visits to GM Dealer Council meetings in an apparent attempt to sooth relationships with dealers. Dealer Councils are made up of dealers elected by their peers to represent the dealer body on both a regional and national basis for each brand. During this period, I had been elected to a three-year term on both Regional Dealer Council and Cadillac National Dealer Council, and consequently was in attendance at the November 29-30, 1999, Western Region Dealer Council Western Region Dealer Council Meeting that was visited by Mr. Clark.
Mr. Clark explained the GMRH initiative, and attempted to ease dealer fears of its threats to their businesses. As part of Mr. Clark’s presentation he stated that GM desired for Buick, Pontiac, and GMC dealers to become channeled on their own, and that GM would assist if necessary. I then told Mr. Clark that GM had owned the Pontiac-Olds-GMC dealership across the street from me for nearly two years, and that GM had repeatedly rejected my many attempts to acquire it for channeling. After several seconds of Mr. Clark’s dazed silence, Western Region General Manager Doug Herberger spoke up and said that he had plans for that dealership and would tell me about them later. Nevertheless, Mr. Clark said he would check and let me know the following Monday about who to talk to about Pontiac. On the plans for Fremont Pontiac-Olds-GMC, later that day Mr. Herberger informed me that Ken Okenquist would be receiving the dealership. I never heard back from Mr. Clark about the Pontiac contact person, so, if Mr. Clark wasn’t already familiar with it, I assume that Mr. Herberger informed him of the Okenquist selection as well.
I am certain that Mr. Clark was especially surprised about GM’s rejection of my attempts based on our acquaintance during the early to mid-1980’s when he was Buick Western Regional Manager. At the time, Buick was a viable standalone franchise and my dealership was consistently among the top four Buick retail volume dealers in the sixteen-dealer San Francisco Bay Area. It was also the number one retail volume dealer in our Buick twenty-dealer district, which included dealers in the San Francisco East Bay Area and part of Northern California. Mr. Clark always had seemed to have great respect for me, as well as my dealership’s performance.
As a result of unrelenting pressure by angered GM dealers, at the January 2000 National Automobile Dealers Association convention, GM CEO Jack Smith announced the scrapping of the GMRH initiative. A subsequent Automotive News article discussed statements by retiring GM Attorney Frank Dunne, who had spearheaded the GMRH initiative. “It was the wrong thing to do,” stated Mr. Dunne. “And the way we did it compounded the difficulties.” The article goes on to state, “Dunne acknowledges that GM ignored dealer input in pursuing the retail initiative. The automaker should not have tried to compete with its own dealers, he says.”
It is refreshing to hear a rare admission by a GM executive concerning bad business decisions and feeling of guilt for its treatment of dealers. It is a shame that it took retirement for the acknowledgement to come out.
GM awards Fremont Pontiac-Olds-GMC in Newark to Ken Okenquist
As noted above, in March 2000 GM awarded Fremont Pontiac-Olds-GMC to Ken Okenquist, making him the fourth dealer or interim manager in 27 months, including the ousted Bob Gee. Mr. Okenquist owned Capitol Buick-Pontiac-GMC in San Jose, but had been an Oldsmobile-GMC dealer there since the early 1990’s until a GM channeling realignment in about 1998, when he gave up Oldsmobile in return for Buick and Pontiac.
At the same time Mr. Okenquist was awarded the Newark store, he also received Dublin Buick-Pontiac-GMC and Colma Buick-Pontiac-GMC, both of which were Bay Area dealerships GM had bought from willing sellers. Fremont Pontiac-Olds-GMC was the only dealership that GM had effectively stolen.
When Mr. Okenquist took over Fremont Pontiac-Olds-GMC, he succeeded Steve Jackson as the person that GM intended to get my Buick and Cadillac franchises when GM would finally be able to induce my exit. He remained the favored person until his group dealerships failed and closed in January 2009, at which time Inder Dosanjh would become the new intended recipient of my franchises.
