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Casualties of Attrition
Joe Cauley was excited about his first day on the job in May 2009 at his father’s Chevrolet dealer ship in West Bloomfield.
This scion of a long-established dealership family had just graduated from Northwood University in Midland — a school specializing in coursework for the “fortunate” children of automobile dealers.
However, there was no college class that could have prepared him for the jolting turn his life would take that day. Young Joe Cauley’s father, Jeff — who inherited the dealership from his own father, Jack, four decades earlier — was at an off-site meeting that day when he called to ask if a letter from General Motors had arrived.
The older Cauley knew his corporate parent was in the process of notifying dealers of their “status,” by way of overnight mail. The status, in this case, was whether Cauley and his son would live to see another day as members of the Chevrolet family.
Dealers had been made aware, primarily through media reports, that GM would be required to truncate its national dealership network as a condition of receiving federal bailout money.
“Open it and see what is says,” Jeff Cauley remembers saying to his son, adding that he felt confident the letter was essentially pro forma — that his franchise would be spared the agony befalling other, less profitable, dealers.
“It sure doesn’t look like good news to me,” Joe reported. “We’re being terminated! What do we do now?”
The question of franchisees’ “status,” which permeated the company’s national dealer network, apparently found West Bloomfield an appealing target; Audette Cadillac, adjacent to Cauley, unwillingly drew the short straw, too.
The shuttering of Audette Cadillac, a West Bloomfield-based concern since 1975, was a double blow that underscored the reality of the situation; nearly 1,550 franchises nationwide have been terminated within the last two years. Audette and Cauley ceased operating under the auspices of GM last fall, effective Oct. 31, 2010.
The Audette site now sits empty, up for sale, and has thrown a cloud over the highly visible — and once prestigious — 20-acre tract of land on the west side of Orchard Lake Road near the Northwestern Highway-14 Mile Road triangle. A “for sale” sign at the front of the Audette property, owned by Bloomfield Hills resident Mark Audette, son of the founder, says commercial real estate company CB Richard Ellis has the listing of the nine-acre site with an asking price of $5 million.
DEAR JOHN, THIS IS GOODBYE .
GM’s “classy” way of breaking the news to its dealers, and the subsequent termination process, left bitter feelings with both the Cauley and Audette families. Yet, Cauley told customers he fought very hard to remain a Chevrolet dealer “…apparently, however, we did not fit into the plans of General Motors,” he said in a statement to his clients.
His battle included an in-person meeting with several GM executives at the company’s headquarters in downtown Detroit. He pointed out that Cauley Chevrolet had a “very high customer satisfaction rating,” was “one of the top four Chevy dealers in the Detroit metro area,” and had been a “high volume Corvette sales leader nationally.”
In the end, however, he reluctantly acknowledged that “… we found ourselves in the wrong location in GM’s master plan of downsizing; they were going by the numbers.” In its heyday, Cauley Chevrolet sold 1,600 cars a year.
Mark Audette, too, is dismayed about GM’s actions, but is reluctant to talk publicly other than to point out that he was a bit puzzled by the decision, given that Audette Cadillac was 20th in Cadillac sales volume nationwide.
“Fortunately, almost half of our 80 employees got jobs in sales and service at LaFontaine Cadillac (in Highland). We’re just finishing up the details here.”
One of his former salespersons is his cousin Mary Ann Audette of Commerce, who hooked on with LaFontaine selling Caddies, Buicks and GMC trucks. While still dismayed, she is sanguine about her new digs further north.
“We all were absolutely shocked when we received the termination notice,” she says. “We felt Audette Cadillac had been doing a great job for GM. But now, I’m aggressively trying to win back my old customers.” The Cauleys, for their part, are staying in West Bloomfield and have begun a “new life,” in two buildings, refashioning the former Chevrolet facility into Cauley Performance Automotive.
The other showroom, Cauley Ferrari, remains, and is the only Ferrari dealership in Michigan — and only one of 35 in the United States; the average Ferrari costs about $280,000.
GM spokeswoman Ryndee Carney declined to comment on the Cauley and Audette cases, other than to point out they were given “some financial assistance” along with the other terminated dealers.
A number of dealers nationwide appealed their termination through an arbitration procedure, and 806 GM dealers were reinstated, according to Carney; 4,500 dealerships remain from GM’s original total of 6,049.
Cauley declined arbitration in favor of GM’s “financial assistance.” Mark Audette wouldn’t comment on arbitration.
GM: ‘WE HAD TO CUT’
GM’s Carney explains: “We went through a bailout, a bankruptcy, cut four brands and saw our market share drop to about 20 percent. We just had to be viable. We had to cut dealerships. We based our decisions on customer satisfaction rates, sales volumes, location and other factors.”
Jeff Cauley said he understands GM’s basic premise of wanting fewer dealers and then investing in them to make them stronger, “but you just can’t do that to old-time successful dealerships,” he says — while also conceding the government’s bailout was necessary to save GM.
Cauley’s former sales territory has been absorbed by Serra Chevrolet, which opened last spring in the former Saturn dealership on Telegraph north of 12 Mile in Southfield. But Cauley wonders, “Why wouldn’t they want a beautiful and modern point like ours in affluent West Bloomfield?”
Other local dealers, including Joe Panian Chevrolet on Telegraph south of 12 Mile in Southfield and Dick Morris Chevrolet on Haggerty in Walled Lake were also terminated; the latter is now Morris Motors and sells used vehicles.
“I hear from various sources that the result isn’t working out too well for GM,” Cauley says. “The remaining dealerships aren’t picking up the sales slack, mainly because many customers of the terminated points are upset and going elsewhere to buy.” West Bloomfield Township’s assessor, Lisa Hobart, said there’s no discernable financial impact from the vacant Audette land because the owner continues to pay taxes on the property. Cauley’s assessment has been reduced somewhat because the company released 30 employees and ceased some operations. Hobart won’t say whether any tax abatements or other incentives might be offered to prospective buyers of the Audette site.
So, as with many of their friends and neighbors, the Cauley family has been forced to develop a “plan B” in order to survive in the brave new world the father-son team now finds themselves in.
“With our strength in Corvettes and Ferraris, and the fact that my son and I both race cars, it just makes sense to go more in that direction,” Jeff Cauley says.
“We have cool cars, trucks and all things automotive, perfect for this up scale area.”
Joe Cauley, 23, of West Bloomfield, is now used vehicle manager of the operation. He says he has gotten over the shock of that GM letter his first day on the job, and is “excited about the challenge” of the new Cauley business.
“And it’s nice to be an independent dealer and not have to answer to anyone else.” RT