Time to Ponder
Posted by Ed Klassen
OK. Enough already.
Times are tough for GM dealers. It is time that we realize how important it is to support them NOW.
OK, enough already.
As my family knows, I have seriously warned them some months ago that we are in uncharted waters in regard to our economy and that they must align themselves with some cash flow. Cash, in these times, is KING.
When Kathy and I went through our toughest personal and business financial times, it was back in the early 80's, and Canada was in a deep recession. Interest rates were above 20%. We had just built our new GM dealership in Port Hardy, and this hit us like a truckload of bricks. With an immediate and severe action plan, we were very lucky to come through that time. I will never forget that we made $974.00 that year and we thought we had done very well. Many dealer principals that had been in business for many years went out of business, because they did not respond quickly enough and simply were not prepared to take the hard steps needed to cut expenses to the bone, hunker down, and personally work harder than you ever could imagine until the storm subsided.
The thing I will never forget is this fact. Most banks are not your friends in the times you need them the most. Certainly, when all is going well, they can not do enough for you. When hard times hit, regardless of the longevityof your positive relationship with the bank, chances are they will not stand behind you when they see you struggling in a bad economy. It can lead to a business persons biggest nightmare.
As those that know me are aware, I had a 34 year ride with General Motors. Except for the dark recession year in the early 80's, I can honestly say that I have been proud to be associated with GM. They have always been the biggest automobile manufacturer in the world, and have been a solid contributor to the North American work force. I can also say that over the past years, GM have built cars and trucks that are second to none in quality.
I guess some bad decisions from the leaders of yesteryear set precedent to our predicament today. When sales soar at over 30% of market share, you can bury a lot of expenses and bad decisions under the carpet. Well, times have changed, and the market has greatly decreased. Although this is simplistic, it is a fact that GM simply can no longer sustain the costs of business today to stay competitive and obviously now cannot stay afloat unless it becomes a radically changed company.
Here is the point. As you know, dealerships are GM's distribution point. Dealerships are, by enlarge, stand alone family businesses that have worked hard to earn credibility and honor in their community and have exalted General Motors to being the very best automobile manufacturer bar none.
Now, almost overnight, GM has a financial struggle. Yep, you guessed it, it trickled down very quickly to all the thousands of dealers that have been the lifeline to the manufacturer. Banks started to call in lines of credit, customers who did decide to buy could not get financed because banks were not lending. So, the dilemma has evolved into a crises. As GM struggles to get federal assistance, the picture has become clear. Downsizing is inevitable including dealerships. Car and truck lines are being cut in half. Dealerships will be cut almost by 50% because GM obviously do not need such a high volume of distribution network when market share has shrunk so immensely.
I just want you to find an extra measure of empathy or sympathy for all the dealers, that, through no fault of their own, they are suddenly being purged. Most of them are in communities where rumor spreads like wildfire, and too often, the rumors are very hurtful to the businessman that has been a good corporate employer, often for many decades.
The sins of decisions made by GM corporate executives many years ago have come back to haunt them, but it has also brought down all the dealerships that had nothing to do or say about the corporate decisions.
In the city I live in, one of the large GM dealers here has been advised he will be affected with the downsizing and that he will loose the franchise. The banks, in turn, have not been kind either. So, now the businessman that has been a hero in the community for many decades is being rumored to be in receivership due to bad business practices etc. What garbage! This is simply not true. I guess people like to kick you when you are down, but I find this very disturbing. How about a complimentary note to the editor of "job well done". How about some community support in time of need.
This is happening to most communities right now, including the one where my wife and I started on Vancouver Island. After our family owning and successfully operating a GM dealership there for some 32 years, it seems hardly fair that any of our family should be blamed for poor business practices or anything that even eludes to such inaccuracies. Without doubt, if General Motors would be healthy, this dealership would be in our family for decades to come. Yet, with all the uncertainty with GM's very existence, the black cloud is extended to all dealerships that have brought huge volume losses and increased stress levels immensely. Do yourself a favour and give these community businessmen the respect they deserve. Support them in any way you can. Give them positive feedback. Write your local papers and let the world know what you think of them. They need you NOW.
Ed
We are very happy that our Port Hardy dealership and the Surrey dealership retained their franchise. PTL.
As my family knows, I have seriously warned them some months ago that we are in uncharted waters in regard to our economy and that they must align themselves with some cash flow. Cash, in these times, is KING.
When Kathy and I went through our toughest personal and business financial times, it was back in the early 80's, and Canada was in a deep recession. Interest rates were above 20%. We had just built our new GM dealership in Port Hardy, and this hit us like a truckload of bricks. With an immediate and severe action plan, we were very lucky to come through that time. I will never forget that we made $974.00 that year and we thought we had done very well. Many dealer principals that had been in business for many years went out of business, because they did not respond quickly enough and simply were not prepared to take the hard steps needed to cut expenses to the bone, hunker down, and personally work harder than you ever could imagine until the storm subsided.
The thing I will never forget is this fact. Most banks are not your friends in the times you need them the most. Certainly, when all is going well, they can not do enough for you. When hard times hit, regardless of the longevityof your positive relationship with the bank, chances are they will not stand behind you when they see you struggling in a bad economy. It can lead to a business persons biggest nightmare.
As those that know me are aware, I had a 34 year ride with General Motors. Except for the dark recession year in the early 80's, I can honestly say that I have been proud to be associated with GM. They have always been the biggest automobile manufacturer in the world, and have been a solid contributor to the North American work force. I can also say that over the past years, GM have built cars and trucks that are second to none in quality.
I guess some bad decisions from the leaders of yesteryear set precedent to our predicament today. When sales soar at over 30% of market share, you can bury a lot of expenses and bad decisions under the carpet. Well, times have changed, and the market has greatly decreased. Although this is simplistic, it is a fact that GM simply can no longer sustain the costs of business today to stay competitive and obviously now cannot stay afloat unless it becomes a radically changed company.
Here is the point. As you know, dealerships are GM's distribution point. Dealerships are, by enlarge, stand alone family businesses that have worked hard to earn credibility and honor in their community and have exalted General Motors to being the very best automobile manufacturer bar none.
Now, almost overnight, GM has a financial struggle. Yep, you guessed it, it trickled down very quickly to all the thousands of dealers that have been the lifeline to the manufacturer. Banks started to call in lines of credit, customers who did decide to buy could not get financed because banks were not lending. So, the dilemma has evolved into a crises. As GM struggles to get federal assistance, the picture has become clear. Downsizing is inevitable including dealerships. Car and truck lines are being cut in half. Dealerships will be cut almost by 50% because GM obviously do not need such a high volume of distribution network when market share has shrunk so immensely.
I just want you to find an extra measure of empathy or sympathy for all the dealers, that, through no fault of their own, they are suddenly being purged. Most of them are in communities where rumor spreads like wildfire, and too often, the rumors are very hurtful to the businessman that has been a good corporate employer, often for many decades.
The sins of decisions made by GM corporate executives many years ago have come back to haunt them, but it has also brought down all the dealerships that had nothing to do or say about the corporate decisions.
In the city I live in, one of the large GM dealers here has been advised he will be affected with the downsizing and that he will loose the franchise. The banks, in turn, have not been kind either. So, now the businessman that has been a hero in the community for many decades is being rumored to be in receivership due to bad business practices etc. What garbage! This is simply not true. I guess people like to kick you when you are down, but I find this very disturbing. How about a complimentary note to the editor of "job well done". How about some community support in time of need.
This is happening to most communities right now, including the one where my wife and I started on Vancouver Island. After our family owning and successfully operating a GM dealership there for some 32 years, it seems hardly fair that any of our family should be blamed for poor business practices or anything that even eludes to such inaccuracies. Without doubt, if General Motors would be healthy, this dealership would be in our family for decades to come. Yet, with all the uncertainty with GM's very existence, the black cloud is extended to all dealerships that have brought huge volume losses and increased stress levels immensely. Do yourself a favour and give these community businessmen the respect they deserve. Support them in any way you can. Give them positive feedback. Write your local papers and let the world know what you think of them. They need you NOW.
Ed
We are very happy that our Port Hardy dealership and the Surrey dealership retained their franchise. PTL.