Repost from my Hive/Leo blog. All original content and opinion.
I was scrolling through my Google news aggregator the other day and a story popped up which piqued my interest. Usually my feed is filled with stories about crypto, or gaming, or whiskey, but on this occasion it was a business article about an industry that is somewhat near and dear to me.
If you grew up in Michigan, there is a very high chance that either you, a relative, or at least someone you know works in the auto industry. Maybe they work in a dealership, or more likely, they are an autoworker in one of the many plants owned by GM, Ford, and Chrysler across the state.
My dad was an autoworker for 30 years, my uncle and grandfather as well. My father in law, my wife's aunt, one of my good friends... you get the idea.
This article had to do with Cadillac and a recent decision by them concerning their electric vehicle line. Like @steevc and @bigtom13, I have a bit of an interest in the advent and evolution of electric vehicles (EV), so after a quick glance I gave it a deeper read.
Disclaimer: Besides being a GM company (which makes it special), I have no great love for Cadillacs. I have never owned one (I like my Buick), and if I were to move up to that next level of luxury, I would probably go with a Lincoln. I think they look cooler, but that is a discussion for another time (Donnie Brasco anyone?).
So anyway, here is the basic run-down:
Back in September, the 880 Cadillac dealers across the United States were told that they needed to invest $200,000 to transition their dealership to sell the yet to be released EV's. They were given until the end of November to decide if they wanted to invest in the transitions or take a buyout and no longer be a Cadillac dealership.
When I first glanced the article I was a bit surprised by the $200,000 price tag for the transition. After reading I realized that capital was being used for purchase and installation of charging stations, employee training, and apparently, the batteries in these vehicles are very heavy, so they need special lifts to move them around.
With dealerships spread all across the country, many of them fall in relatively rural areas. You know, places where people are more likely to buy a luxury combine or tractor than an Escalade. It is largely those smaller dealerships that decided to take the buy out.
About 150 of them in fact.
By all rights, they probably came out ahead on the deal. With lower sales of these luxury vehicles, the $300,000 to $500,000 buyout they got probably covers more than their average annual turnover of Cadillacs. Plus, as you have probably notice, most dealerships carry more than one brand of vehicle, so they will probably be just fine.
For example, the closest Cadillac dealership to me is also a GMC dealer. Who loves a good pickup truck more than those rural folk?
This does lead one to consider if the cost of "progress" or "environmental consciousness" is worth the price to be paid.
In terms of the environment, I think yes. As for progress, who knows. There is a good chance many of these small town dealerships are family owned through several generations. For businesses whose identities have potentially become synonymous with Cadillac, only time will tell the impact this move may have on their future.