General Motors Co. has reversed plans to terminate a program in Virginia that provides reimbursement to dealers for improvements they made on their facilities. An agreement has been entered by GM and the Virginia Automobile Dealers Association on changes to a recently passed bill that would protect dealers from making factory-directed store overhauls.
In February, GM said the proposed law may possibly undercut its Essential Brand Elements program, a national image program that was launched in 2009 that pays quarterly bonuses to dealers who renovate their stores.
GM cited the bill and informed its Virginia dealers that it will stop the program in Virginia as of March 31, according to Autonews. Under the bill, dealers that made store improvements within the last 10 years would automatically meet with the facility portion of a manufacturer's standards program. The dealers association said that GM overreacted.
This measure would only apply to facility programs began after July 1, basically grandfathering GM's Essential Brand Elements program.
Both sides approved the revised language and have made it clear that GM's program won't be affected. Jim Bunnell, GM's general manager of dealer network and sales support, sent a letter to VADA leadership, stating that GM will reinstate the Essential Brand Elements program in Virginia on the condition that the agreed-on language is included.
Bunnell said in this letter that GM appreciates the Virginia Automobile Dealers Association and the willingness of its dealers to meet with the company in order to reach a deal over the facility upgrade provisions of the pending dealer franchise legislation.