Six months after that fateful day in May, we still don’t know exactly how many GM dealers in Canada have been terminated. Some are fighting back with lawsuits but several have already landed on their feet.

Three of those dealers who have reinvented themselves are now Hyundai dealers, all in mid-size markets: Port Hope, ON,  Brandon, MB and Courtenay, BC. 

They have a lot in common – first and foremost, that they didn’t expect to be shut down. In addition, they each have family entrenched in the business, established service departments and a seasoned and loyal group of employees.

Caught by surprise

In Port Hope, Frank Lauria (Lauria Hyundai) was totally blindsided. “We’ve got a pretty high profile on the 401 here, and we’ve sold a lot of cars. I figured they’d expand the Buick line-up so we’d have a business, but that wasn’t the case.”

Lauria had approached Hyundai back in 2004, when he opened a new facility on his 7.7-hectare (19-acre) site. The Pontiac Buick store occupied just 2.6 hectares and only half the 300-metre frontage. “We were interested in adding a franchise then, but Hyundai was opening a new point in Bowmanville, 32 km away. They didn’t want to compromise the prospects of that new dealer by putting more competition into the area (at that time). I understood their reasoning and I admired their corporate ethics.”

Lauria was on vacation when he when got the bad news last May. He called Hyundai immediately and also approached two other manufacturers, one Asian and one German.  He told his staff, “we will have another franchise. And,” said Lauria, “my people know that when Frank puts his mind to something, it gets done.” Hyundai executives arrived in his office on May 25th, and within two months, Lauria had a verbal commitment. Talks continue with the other two factories, with a view to future expansion.

Brian Fowler, proud new owner of Fowler Hyundai in Brandon, is a 27 year veteran of the GM network. Like Lauria, “We were really caught off guard,” he said. “It was like getting news of a death in the family.”  Fowler was one of only three GM dealers of the nine in his area who had completed the imaging upgrades, and more than 50 percent of his business was trucks. With the promise of small cars badged as Buicks, he thought he’d be OK. 

It took a few days to sink in but, after a week, Fowler and his son sat down to  consider their options. Giving up wasn’t among them. “We decided to look at a couple of car lines and we did talk to Volkswagen, but at the end of the day we realized that Hyundai had the vehicle line up we’d do best with,” he said. It was a rough time for staff as well and Fowler was touched when a delegation of employees came to see him with an offer of unconditional support.

In Courtenay, Mike Finneron thought about walking away, but not for long. “I’m 64 years old,” said Finneron, “but my daughter Sue is my GM, and we have 33 very dedicated employees.”  Without Pontiac, Finneron couldn’t succeed, so within 24 hours he activated Plan B. “There wasn’t a Hyundai store in the Courtenay-Comox area, so they were the obvious choice.”  

Family was key

Having family in the business was a key motivator for each of these men. “My wife and I would have been all right financially if we’d just closed down,” said Frank Lauria, “but my son Bud was devastated. He’s my general manager and this was his future.” Brian Fowler’s son Rob is the fourth generation in the dealership and he’d always imagined that Rob would carry on the family business. Mike Finneron’s daughter has worked with him for more than 20 years. “That was definitely one reason Hyundai was happy to talk to us,“ says Finneron.

Hyundai’s VP of Sales and Marketing, John Vernile, agreed. “We like to see clear succession plans in place,” he said. “We welcome a family organization with a long history in their marketplace; dealers who are part of the fabric of their community.”

A fixture in Courtenay for over 30 years, Finneron said the community was shocked when he was shut down. “There was actually a fair amount of anger towards GM.” It took all summer to put together the contract with Hyundai and that was ample time for speculation about what Finneron was doing. “A lot of people were talking about us, which was good. We told staff we had something in the works, but we couldn’t go public. It was probably the worst kept secret in town.”

Hyundai Canada was pleased to find a home for these three dealers but John Vernile says they are the sum total of their GM conversions. “We talked to others,” Vernile acknowledged, “but they didn’t match our market representation research. We’ve been careful not to waiver from our plan. With these three, we’ve moved into new markets, so that’s a plus for us.” 

Back in the car business

Switching to Hyundai went smoothly in each case. Frank Lauria had sold all his parts and vehicles and at midnight on October 1st he resigned as a GM dealer. At noon the next day he started life as a Hyundai dealer. “We took delivery of 130 units that day. The banners went up, and we started selling cars.”

Selling cars again is what Brian Fowler is enjoying. “As a GM dealer, people only wanted to talk  price. Now customers want to know about the car and we have to sell the product. It’s fun again.  We’re back in the car business.”  Fowler had a great first month, saying the quality, the fit and finish of the Hyundais is superior to anything he had from GM.

Mike Finneron also had an excellent first month.  As his last 11 GM units left the lot, six trucks arrived with 63 new Hyundais. Finneron sold 35 perceny more units this October than in October 2008.

I asked John Vernile how these GM veterans would adjust to a different corporate culture.

“They will find Hyundai Canada is a different kind of company,” said Vernile, although he avoided making comparisons. He described Hyundai Canada as nimble, saying, “We’re a rightsized company in Canada.  We don’t have layers and layers of management. We can make decisions quickly and we’re very results oriented.” 

Brian Fowler is adapting happily. “Hyundai makes us feel wanted. I feel like we’re working together. GM’s approach was more dictatorial. And Hyundai gets things done. My son and I flew to Toronto for a meeting and accomplished more in three hours than we would have in two days with GM.” 

Finneron supported that. “There’s no fluff with Hyundai, they’re very matter of fact. Sometimes I’d go to a GM meeting and there’d be more GM people there than dealers. With Hyundai, they’re not top heavy with staff. They’re focused, obliging and easy to work with.”

“My dad was a GM dealer,” said Frank Lauria, “and I’ve  had GM stamped on my forehead all my life. But I couldn’t see the forest for the trees. This change is a breath of fresh air.  Firefighting was a daily event before and in our first month, there hasn’t been a single fire to put out. And the quality of these vehicles is extraordinary.  We’ve had our eyes opened.”

A different culture

The change in culture has affected the sales staff as well.

Fowler agreed that it’s been tough for his senior sales staff to make the changeover but the two new sales guys and more recent hires aren’t having problems. Frank Lauria lost two excellent sales people saying they couldn’t get into the import culture. “One of them was very good at the math and the art of the deal. But that’s not what we need now. Now we have to know product.”

And naturally, these dealers want to keep their service customers. Mike Finneron phoned them all explaining he wants their business but can’t do warranty work. The upside is that local Hyundai owners like having a local dealer for their warranty work. “It’s a good deal for Hyundai that we have such strong technicians and a ready-made first-rate service business,” he added. 

“Service is a big part of our business,” said Brian Fowler, “so we’ll do whatever we can to keep those customers.”  He also let service customers know he can continue to look after them. For warranty work they’ve got lots of other options. And there’s new business. “In our first month we’ve seen 25 to 30 new customers bringing their Hyundais in to us.”

For Frank Lauria, the best thing is the absence of stress. “Before, customers came in with a chip on their shoulder. Every third RO was a warranty issue. The atmosphere was adversarial. We’d look after them as best we could, but we were caught in the middle. It’s completely different now. Now customers come in for regular maintenance, and they’re asking, ‘what else do I need?’ “

GM’s loss is surely Hyundai’s gain.  Said Brian Fowler, “I’m beginning to think GM has done me a big favour. In May I was wishing they’d let me try to make it with the trucks and Buick but now I think we will do better selling Hyundais. We’ve landed on our feet, but I think a lot of people got left high and dry.”

Mike Finneron put it succinctly. “It’s a great marriage. We’ve come out of this beautifully.” 

“Everyone likes a happy ending,” said John Vernile.  “With our product and their expertise, we have a winning combination.”    

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