GM cutting most Cadillac dealers
The Business Journal of Milwaukee - by Rich Kirchen
General Motors Corp. is dropping the franchises of 70 percent of Cadillac dealerships nationwide and southeast Wisconsin is no exception, leaving only two area dealerships confirmed as continuing beyond 2010 — Metropolitan in West Allis and Crest in Brookfield.
Metropolitan Cadillac, in fact, is running commercials urging customers whose dealers are closing to switch to its dealership.
“My understanding is that there are a lot of Cadillac stores closing,” said Metropolitan president Max Stephenson. “The only two that are staying open are Metropolitan and Crest.”
General Motors will not disclose the identities of dealerships that are closing. Only one area Cadillac dealership has identified itself as dropping its Cadillac status: Amato Cadillac in Glendale, which Aug. 21 became a Nissan dealership.
“We had seven Cadillac dealerships in our zone — we were very over-dealered,” said owner John Amato.
Don Schultz, a sales manager at Crest Cadillac, said the dealership at 12800 W. Capitol Drive is surviving as a new vehicle franchise but declined further comment.
Metropolitan and Crest ranked as the top two dealerships for new Cadillac car sales in 2008 with a 31.3 percent and 23.8 percent market share, respectively, according to Reg-Trak Inc., Waterloo. In the first half of 2009, the two dealerships again led with 25.3 percent for Metropolitan and 18.6 percent for Crest.
Not all Cadillac dealers that are losing their franchise will follow Amato’s quick exit. They have until October 2010 to close, but will not receive any new vehicle inventory from GM between now and then.
GM spokeswoman Susan Garontakos said the company plans to reduce the number of Cadillac dealers nationwide from about 1,400 to about 400 by the end of 2010.
GM evaluated dealerships’ sales figures, capital structure and customer service record, Garontakos said. Dealers can appeal GM’s actions, but the company’s executives in August ruled on the appeals, leaving little recourse at the moment for those who lost appeals, she said.
The automaker believes reducing the number of dealerships will enable GM to more effectively compete with BMW, Lexus and Mercedes, Garontakos said. Those other luxury car makers have between 200 and 400 dealerships each nationwide, she said.