Cadillac dealers cry foul over tiered incentives

by Justin King
Cadillac dealers cry foul over tiered incentives

Critics claim the system violates franchise agreements and will cause smaller dealers to collapse.

Several Cadillac dealers have stepped up resistance to the company's proposed reforms for dealer interactions.

'Project Pinnacle' will divide dealers into five different categories based on projected sales. Groups face different stipulations for services, facilities and other business elements, with a focus on incentivizing a high-end retail experience across the range.

A group of state dealer associations has raised concerns over certain compensation provisions, arguing that the proposed scheme will disproportionately divert higher payouts to large dealers that can afford larger investments in service programs, according to a letter to Cadillac chief Johan de Nysschen obtained by Automotive News.

"The winners can make the required investments and prosper," the letter says. "The other dealers face business failure."

The wording hints at an increasingly adversarial relationship between the company and its franchisees. The complaints are not only limited to smaller dealers; some top-tier sellers are said to view the new service requirements as a risky investment that may not pay off.