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GM Dealer: It's Like Willy Wonka

GM logo, General Motors logo
GM logo, General Motors logo

It's a tough day waiting for the mail.

Hundreds of GM dealerships are getting letters telling them that time is running out, that it's unlikely their franchise contracts with the automaker will be renewed. Most of those contracts expire in October of NEXT year, so this doesn't mean 1,100 dealerships are disappearing overnight.

Eventually GM wants to reduce its dealership total to 3,600 from nearly 6,000.

"It's like Willy Wonka, waiting for the golden ticket," says David Greiner of Greiner Buick-Pontiac-GMCin Victorville, California. He thinks he has a one in four chance of being cut loose from the company. His family has sold GM cars here for 22 years, ever since his father, Bob, moved west from Detroit. More likely, Greiner thinks he'll be forced to merge with the Chevy/Cadillac dealer down the street. What does a merger mean? "I really don't know," he said with a laugh. "This is kind of unprecedented."

Business is down by half in the last year here, and more than a third of the staff has been let go. Yet Greiner supports the idea of fewer dealers.

"Quite frankly, us dealers have been devaluing the brand," he says. "There's too many of us fighting over the same dime, and we really don't have the pricing power, we don't have the ability, to bring the buyer to the table, so we're really fighting and creating a less beneficial customer experience."

He faces some special challenges: much of the economy in Victorville is based on construction, an industry in the dumps, and he has the added challenge of convincing Californians to "buy American." It seems that all the J.D. Power reports in the world aren't bringing in a lot of people looking to buy Buicks. How can he change that?

"That's a tough question," he says "The manufacturer needs to do the manufacturer's job, and the dealers need to do the dealer's job...this restructuring is so good because it's going to allow us to control the distribution, that's what we're good at-creating the customer experiences, distributions, servicing cars, getting people financed. We don't have the dollars or the ability to go put out the media message to change someone's mind."

Greiner is hoping he gets the same news the Chrysler dealershipnext door received yesterday-an unconditional vote of support from the bankrupt automaker. "They had a party," he said. He's hoping to have a party today. But even if the news is bad, even if he has to merge, "I'm always optimistic about the future." No matter what brand he's selling, "People buy from us because they're buying from Bob and Dave."

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  • Based in Los Angeles, Jane Wells is a CNBC business news reporter and also writes the Funny Business blog for CNBC.com.

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