Why GM Leader Had to Go – A Local Perspective
March 31st, 2009 by WY Daily Staff
Art Hudgins of Hudgins Holiday Cadillac-Chevrolet
Williamsburg Cadillac-Chevy dealer Art Hudgins discusses changes at GM.
In the first two months of 2009, General Motors sold 265,295 fewer cars and trucks than they sold in the first two months of 2008, a 51% drop in sales.
It’s not clear exactly how many total vehicles are sitting on dealer lots or remain in storage at the factories, but all of them are built and ready to be driven.
Meanwhile, General Motors keeps running ads for cars not scheduled to be built for another two years (the Chevy Volt), and vehicles that no one wants, like the Cadillac Escalade Hybrid.
The unbuilt Chevy Volt
Examples like this make it easy to understand why Rick Wagoner needed to step down as the head of GM. Art Hudgins, the 32-year veteran owner of Hudgins Holiday Cadillac and Chevrolet on Route 143 in Williamsburg, feels the manufacturer has lost touch with the customer.
“We ask our customers what they are looking for,” said Hudgins.
“They are the ones spending the money. The customer knows what their wants and needs are more than the manufacturer.”
The “basic” rear wheel drive Escalade Hybrid lists for $73,135, compared to $64,810 for a standard gas Escalade.Meanwhile, the hybrid model has a fuel rating of 20mpg in the city and 21mpg on the highway compared to the gas version’s 12mpg in the city and 19mpg on the highway, making the Escalade Hybrid what Hudgins calls a “heavy priced vehicle.”
“Perception-wise, people look at hybrids as being little cars getting 50 miles to the gallon,” noted Hudgins.
“I haven’t had a lot of experience with people coming in to drive hybrid SUV’s.”
Hudgins’ experience guided him away from even offering the hybrid model for sale at his dealership. He explained that General Motors does not pay for a dealer to take on a new line from the manufacturer, like the Escalade Hybrid.
“By the time we invested in parts and special training to be able to sell and service that car, we would be looking at a $7,000 to $10,000 investment. But hybrid folks seemed to be more interested in cars than the truck,” said Hudgins.
“We weren’t sure how many we could sell. It was all short term thinking on GM’s part. And when gas went down the interest in hybrid cars went down with it.”
General Motors has eliminated thousands of jobs as part of a restructuring plan. But their leader’s inability to see the deeper problems caused by being so out of touch with the market kept them from moving quickly enough to change old, bad habits. Speed of change is why President Obama requested Wagoner’s resignation.
Hudgins depicted Wagoner as a “good man who just wasn’t moving fast enough” in the government’s eyes. He said dealers are kept in touch via emails every day from representatives at the manufacturer, and the information they had been receiving did not predict yesterday’s news of Wagoner’s resignation.
“What we had heard and read early on was different than what the government said yesterday. I don’t think anyone in our industry really understands what happened to make the government move faster on making changes at GM, other than everything in the economy has moved more quickly than expected.”
So what would Art Hudgins like to see change with a new leader at the helm of General Motors?
“I would like to see strong, strong relationships between the dealers and the manufacturer, just like the dealer must have with the customer,” said Hudgins.
Hudgins said the manufacturer’s disconnect with their dealers has been a bone of contention over the years, making GM “not as in touch with the customer.” This is certainly evidenced in their obsession with advertising products that they don’t have or that no one wants. Add to that the smugness of their current commercial spokesperson (former football player) Howie Long and you can see why Hudgins is frustrated with corporate arrogance.
“We’ve got great products,” said Hudgins. He pointed to gleaming examples like the North American Car of the Year winning Chevy Malibu, the popular Cadillac CTS and Chevrolet’s new crossover vehicle, the Traverse.
“I just think the manufacturer has got to put programs together that make the dealers profitable instead of making it such a strain to give the customers a car. The more satisfied our customers are, the more cars we will sell.”