Cadillac gives relief on Pinnacle
“We want to make the program work,” said Cadillac President Johan de Nysschen, pictured here meeting with dealers on Saturday. Photo credit: Joe Wilssens
NEW ORLEANS — Cadillac is modifying portions of the dealer-incentive program that starts in April to let retailers receive payments sooner and earn partial bonuses even if they fall as much as 15 percent short of monthly sales targets.
The brand also is relaxing some of the standards it plans to make dealers meet and creating an appeals process for those ruled to be out of compliance. The standards are being made “more realistic inside the business atmosphere that we’re in,” said Will Churchill, chairman of the Cadillac National Dealer Council.
Executives informed dealers of the changes at the brand’s make meeting Saturday morning, about 18 hours after it rolled them out to Churchill and other council members.
“We want to make the program work,” said Cadillac President Johan de Nysschen. “The program succeeds when we put money into the pockets of our dealers. It fails if we don’t.”
Churchill said the program, known as Project Pinnacle, might see additional tweaks before it takes effect April 1. Until all aspects are finalized, the council is holding off on giving the program its full endorsement.
“Our goal is to 100 percent be able to support it,” Churchill said. “When it’s finished, we’ll be able to look at it and then we can say, ‘Yes, we’re 100 percent supportive, or we’re not.’”
Will Churchill: The standards are being made “more realistic inside the business atmosphere that we’re in.”
Pinnacle has been a source of contention among Cadillac dealers since de Nysschen announced it about a year ago. He has said it’s designed to make Cadillac more competitive with other luxury brands.
Some dealers who learned of the changes Saturday said they still have concerns but that they appreciate de Nysschen’s responsiveness to negative feedback.
“They’re trying to be flexible, but it’s a lot to swallow at one time,” said Ray Nordstrom, president of Midway Chevrolet-Buick-Cadillac in Pocomoke City, Md. “We just have to find a way forward.”
De Nysschen said the brand is trying to minimize dealerships’ cash-flow implications during the transition by giving out credits sooner. In addition, while sales targets and the bonuses for meeting them will remain as originally planned, stores can earn lesser amounts when achieving at least 85 percent of their target.
“They can get into the money a little bit sooner and take some of the anxiety out that they won’t be able to achieve their sales bonuses,” de Nysschen said.
John Symes, president of Symes Automotive in Pasadena, Calif., said he was particularly relieved to find out that dealers will receive a 1 percent floorplan interest credit when they are invoiced instead of when a vehicle is sold, as the Pinnacle rules initially stated.
“That’s huge,” Symes said. “It’s still contentious, but it’s getting better.”