General Motors might make Oldsmobiles for another three to five years. But dealers like Jack Hayes in Akron can't wait that long to start planning for life after the 104-year-old brand.
Hayes sells Olds and Pontiac vehicles; Olds accounts for 56 percent of his business. He bought the dealership about 10 years ago, taking over an operation that had been selling Olds since 1953.
"I have a 40-plus years' following of Olds customers here," said Hayes, who remodeled his Olds showroom in 1997.
But rather than wax nostalgic or cry foul about GM's decision, Hayes said he's looking for another GM brand to sell. He intends to sell Olds until they're not made anymore, and he wants to add a brand to his product mix as soon as possible to start building the kind of customer loyalty he's enjoyed with Oldsmobile.
Many of the 2,800 Olds dealers nationwide are in similar positions after GM's decision to retire the brand. They're determined to keep their businesses alive, but want another brand -- preferably from GM -- to fill the void after Olds is gone.
GM has made it clear that it's sticking with its decision, and reiterated that point during a closed-door meeting with Olds dealers in Las Vegas earlier this month at the National Automobile Dealers Association convention.
That aside, there's still much that GM and the dealers need to sort out. GM has pledged to provide each dealer with a financial settlement, based on a formula, to ease the transition.
GM hasn't specified when it will stop making Olds vehicles, saying that it will make them as long as they remain "economically viable." If they last through a typical product life cycle, they could be made for three to five more years. The last revamped Olds model, the 2002 Bravada SUV, will roll into showrooms next month. The other four vehicles in the Olds lineup are still fairly fresh.
"The market will determine how long the vehicles will continue to be sold," said Terry Sullivan, a GM spokesman.
Regardless of how long production goes on, GM has pledged to give its dealers one year's warning before it stops making Olds.
GM is talking with dealers about two types of settlement offers. One would pay a dealer between $1,675 and $3,100 for each Olds vehicle a dealership sold during its best sales year from 1998 to 2000. Under that plan, a dealer that sold 100 Oldsmobiles in its best year would receive between $167,500 and $310,000.
Dealers who sell exclusively Olds or draw a high percentage of their sales from Olds would receive bigger payments, since they would absorb a bigger hit when Olds goes away. The other compensation package, which GM says will be awarded in fewer cases, would pay less per vehicle but include extra money for recent expenses such as renovations and new signs.
Seeking suburban locations
"We'll negotiate the best settlement we can for the franchise," said Joe Smith, vice president of David Cadillac Oldsmobile GMC in Lockport.
The dealers are keen on getting good settlements, but they're also focusing on the future of their businesses. "A large majority are very interested in understanding what possibilities for additional franchises exist," Sullivan said.
GM isn't making blanket promises to the dealers. "It's just an individual situation and we have to evaluate every dealership in every area," Sullivan said.
Consider Roger Tunmore's case. His family-owned new-car dealership in Buffalo sells nothing but Olds, one of 63 such dealerships nationwide.
The Tunmore family's car dealership opened in 1923 and has sold Olds for 70 years, making it among the oldest in the country. The Tunmore family also sold Datsuns, later known as Nissans, from the late 1960s to 1994.
Like Hayes, Tunmore has been trying to focus on what the future holds for his dealership and its 40 employees. "It was never really personal, but it was personal because we've been selling product for so long at this location," he said, referring to GM's decision to eliminate the brand.
Not only does Tunmore sell only Olds -- his dealership and Gary Pontiac are the last two franchise new-car dealers left in the city of Buffalo.
GM and other automakers have emphasized putting dealerships in the suburbs, where they're closer to the population base and have space for large new showrooms and car lots. Tunmore said if moving out of the city becomes a condition of receiving a new franchise, he'll consider it. He said his business is viable and he wants to keep selling new cars.
"I just don't think you can limit anything," he said.
Hayes expects three factors to weigh heavily in GM's decisions about awarding new franchises to current Olds dealers: performance, location and their customer satisfaction rating.
For some dealers, location could prove an obstacle to selling another GM brand. GM has to be careful not to infringe on other franchise agreements already in place in an area.
GM will award new franchises where it makes good business sense, Sullivan said.
As those negotiations unfold, the Olds dealers are busy selling vehicles. Sales have actually risen compared to a year earlier since GM made its announcement. National sales were up 4 percent in January, at a time when U.S. auto sales were lagging.
"They're hot as a pistol," Smith said.
GM has helped pump up interest in Olds, offering attractive incentives and rebate offers, along with a five-year, 60,000-mile warranty. People who bought or leased a new Olds as far back as the 1996 model year are being offered $1,500 toward the purchase or lease of a new Olds, or $1,000 toward another new GM vehicle.
Last year, Olds sales accounted for 3 percent of all new-car sales in Western New York, according to the Niagara Frontier Automobile Dealers Association, which collected figures from eight Olds dealers. The total number of Olds units sold in the region was down 13 percent from 1999. Olds eliminated two vehicles, the EightyEight and the Cutlass, from its lineup last year. Nationwide, Olds sales slipped 18 percent in 2000, though four vehicles in its lineup posted record individual highs. While Olds sold more than 1 million vehicles a year in the mid-1980s, the brand's sales for 2000 were about one-third of that total.
Kevin Campbell, president of Glen Campbell Chevrolet-Oldsmobile in Williamsville, said he sees Olds remaining a viable brand and noted that it outsold Toyota in the region last year. "I don't see people jumping off the product," he said.
For now, Olds dealers are waiting to see what new opportunities GM might offer them. Hayes said he's pleased that none of his 22 employees has left since GM announced its plans to eliminate the brand. "No, we're not happy about the eventual demise because we've been Olds people," Hayes said. "But we need to become GM other than Olds in the future. That's being realistic."