Jacques J. Moore and Robert C. Hughes want only one thing from General Motors Corp.
"We want it to be a car company again," said Hughes.
"That's right," said Moore. "We don't want it to be a finance company. We don't want it to be an insurance, electronics or communications company. We just want GM to get back to making the best cars and trucks in the world."
Moore is the dealer-principal of Moore Cadillac-Hummer in Vienna, and of a sprawling Cadillac-Hummer sales and service facility now under construction in Dulles. Hughes is his longtime general manager.
The two men listened closely last week to GM's announcement of a tentative agreement with the United Auto Workers to cut billions of dollars from the company's health care costs, potentially generating cash savings of about $1 billion annually.
That money can help improve GM's cars and trucks, Moore and Hughes said.
But what really gladdened their hearts was the announcement by G. Richard Wagoner Jr., GM's chairman and chief executive, that the automobile manufacturer is considering selling its finance operation, General Motors Acceptance Corp., the most consistent moneymaker in GM's business portfolio.
On the surface, that may seem an odd thing to celebrate. GM's automotive operations have lost nearly $4.5 billion in North America so far this year, including $1.6 billion in the third quarter. GMAC, which finances dealership and consumer loans, as well as home mortgages, always makes money. The finance company reported record third-quarter net income of $675 million, up from $620 million in third-quarter 2004.
But in the minds of many of its 7,342 dealers, GMAC's apparent success has been an enormous burden for the company's core business, which is making and selling cars and trucks.
An aside: A dealer or dealership is not to be confused with a retail store or other sales outlet. For example, Moore is a dealer. But the Moore dealership owns a chain of Cadillac and Hummer stores in Northern Virginia and Richmond. GM's current roster of 7,342 U.S. dealers, as of last Jan. 1, own and operate 14,844 GM-franchise stores in the United States.
The big problem, from the viewpoint of many GM dealers, is that the automobile manufacturer for too long has tried to be something other than a car company, much to the detriment of its basic enterprise. And the more GM's non-auto businesses succeeded, the more distracted the company became, paying enormous attention to the balance sheets of GMAC and now-sold businesses, such as Electronic Data Systems Corp. (EDS), while ignoring the crucial business of making cars and trucks.
"We've had a number of visits with GM executives where we told them that they needed to concentrate on the thing that made GM great in the first place. They'd listen. But we always left not knowing if they got the message. Now, it looks like they've got the message," said Hughes, referring to Wagoner's proposed sale of GMAC and his promise to pour billions of dollars more into the improvement of content -- everything from engines to passenger cabin interiors -- going into GM cars and trucks.
To people worried about the apparent shift of heavier health care costs from corporate to employee shoulders, the concerns of Hughes and Moore may seem myopic, even selfish. That is a misconception.
To understand, you must enter the car dealer's world, instead of accepting the disparaging, stereotypical image of car dealers often presented by the media.
Take Moore and Hughes. They've been in business nearly 30 years, investing hundreds of millions of dollars in plants and equipment -- and into the communities in which they do business. Moore is currently spending tens of millions of dollars more in the ambitious expansion of his Vienna facility and the construction of his brand new sales and service center in Dulles.
Hundreds of Moore employees and their families depend on the success of those investments -- not to mention all of those people who have jobs designing, developing, manufacturing, selling and transporting supplies to the dealer's stores. But the bottom line is that if those stores don't have quality products -- new cars and trucks that buyers want -- they are out of business.
"We don't sell insurance," Moore said. "We don't launch [communications] satellites. We sell Cadillacs and Hummers."
Isn't that a problem, selling big Hummer SUVs in a time of high fuel prices? Isn't that just another example of GM launching the wrong product at the wrong time and messing up its dealers in the process?
Hughes laughed. He asked me to accompany him and Moore to the dealership's Hummer storage lot, which was practically empty, with the exception of the huge, and hugely expensive (about $130,000 per copy), Hummer H1 models. There also were several smaller Hummer H2 models -- about 10 miles per gallon with prices starting at $53,855 -- sitting in unsold glory.
But the empty spaces had been occupied by Hummer H3 SUVs -- all now sold and delivered. Moore has asked GM for many more.
The H3 models are the newest and smallest Hummers. They get 16 miles per gallon in the city and 20 miles per gallon on the highway -- not bad for a mid-size SUV. And they can do most of the stuff that the H1 and H2 can do off-road. H3 prices start at $29,500.
"That's what I mean," said Hughes. "This is what can happen when GM concentrates on making cars and trucks. We get a winner. That's all we want. We want them to stop trying to do everything else that has nothing to do with cars and trucks and start producing more winners."