General Motors appears to be getting some takers on its offer to buy out Buick dealers who don’t want to invest hundreds of thousands of dollars in adding electric vehicle chargers and other tools needed to sell and service electric vehicles as the brand transitions to all-electric by 2030.
But just how many remains unclear. A GM spokesman declined to comment on the number, if any, of its nearly 2,000 Buick dealerships across the country opting to sell the franchise back rather than invest in the electric future, citing legal confidentiality conditions. But Buick is asking dealers to commit a minimum investment of $300,000 to $400,000 to prepare their stores to sell and service EVs.
The owner of a Buick dealership in another state, who is making the EV investment to continue selling Buick vehicles as it moves into EVs, told the Detroit Free Press that GM offered him inventory from other Buick dealerships in his state where the owner has opted to take a buyout. The dealer asked for anonymity due to the confidentiality of the buyouts.
In Michigan, where GM has about 100 Buick dealerships, a metro Detroit Buick dealer told the Free Press that it’s his understanding that all the metro Detroit Buick dealers are making the investment to sell and service future EVs, but some smaller dealers in rural areas are taking the buyout offer. Other dealers echoed that information.
Buick spokesman Sean Poppitt declined to comment on whether Buick was distributing inventory from those dealerships that are selling back their franchises to GM.
Buick makes ‘generous offer’ to Michigan dealer
One of those Buick dealers in Michigan who considered an offer was Dick Garber, owner of Garber Automotive Group, which sells 17 brands under 22 rooftops across the country. In Michigan, Garber Buick in Saginaw is the oldest Buick store in the nation, having been in the Garber family since 1907. Garber also recently acquired Garber Chevrolet Buick in Chesaning, about 30 miles northwest of Lansing. His group owns three Buick stores in Florida and one in South Carolina.
“I spoke to Buick and we only engaged in conversation on one of them,” Garber said, declining to say which of the stores he talked to GM about a possible buyout. “Most of the markets we represent them in are single-point markets where there are no other Buick points. We discussed the opportunity and we opted to stay. We believe in the brand and we believe in General Motors and it was an easy decision for us.”
Garber said the offer GM made him was “generous and fair,” but given his family’s long history with Buick, he has “tremendous loyalty” to the brand and GM. He said the $300,000 to $400,000 investment is doable and “consistent by what we’re being told by the brands we represent.”
Garber said he would sell 700 to 800 new Buicks at his store in Saginaw in a typical year, but given supply chain issues limiting inventory across the nation this year, he expects to barely sell 350 new cars there by year-end. At Chesaning, which is a smaller market, they will sell just shy of 100 new Buicks, he said, which is improved volume from the previous owner who sold “a handful” a year.
The buyout option is practical, Garber said. Buick’s sales per rooftop are some of the lowest in the industry and the brand would be more in-demand if they increased the sales per rooftop.
“So I hope a number of dealers will take the buyout,” Garber said. “I know GM is being very generous and very fair and it could be good for everyone.”
The terms of the investment
In a statement Poppitt sent to the Free Press on Tuesday, the automaker said, “We see Buick’s dealer network as a business advantage, and they will remain a critical part of the retail and relationship chain with customers. Acceptance of an offer is voluntary, but all Buick dealers who remain must be adequately prepared to sell and service Buick EVs. We’re not in a position to comment further on the details of confidential discussions, but any dealer who wants to discuss this program is strongly encouraged to contact the Buick team.”
The minimum investment to be an EV-ready Buick dealer is estimated to be $300,000 to $400,000, but could vary depending on the dealership size and if it is paired with another GM brand that has EV offerings, Poppitt said.
GMC, for example, sells the Hummer pickup and will offer a 2024 Sierra EV. Cadillac sells the Lyriq SUV and will offer the ultra-luxury 2024 Celestiq sedan. Chevrolet offers the Bolt and Bolt EUV now, and it has several more EVs planned such as the 2024 Equinox, 2024 Blazer and 2024 Silverado coming soon.
“There’ll be elements (of the investment) that encompass both brands, but there’ll be separate elements for each brand too, which is why it’s a range,” Poppitt said. “If you’re a stand-alone Buick dealer, it’s probably a lower investment.”
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Poppitt further clarified that point in a follow-up email saying if a Buick dealer also has Chevrolet, GMC or Cadillac brands and has already invested in such things as charging equipment, a forklift or special tools, those items may count toward part of the EV compliance for Buick. But an additional investment might be needed in many cases to add more chargers as Buick EV requirements increase.
Northern Michigan dealer commits to all its GM brands
In June, Buick unveiled the Wildcat EV concept and declared the mid-luxury brand’s lineup would go all-electric by 2030. GM’s luxury brand, Cadillac, will also have an all-electric lineup by the end of the decade.
In September, Duncan Aldred, vice president of global Buick and GMC brands, told the Buick dealer body about the option to raise their hand for an offer from GM to buy out their franchise if they do not want to make the investment in selling an all-electric lineup. That buyout program has the support of the Buick National Dealer Council. Cadillac offered its dealer body the same type of program in 2020 after it declared it was going all-electric.
In Michigan, a handful of Cadillac dealers took GM up on the offer. Nationally, 170-180 of Cadillac’s 870 dealers, or about 20%, took buyouts that ranged from $300,000 to $700,000 to give up their franchise rather than make the investment in servicing and selling EVs, the Free Press reported.
At Randy Wise Buick GMC in Fenton, Manager Sean Mifko said the store is “all in” to sell Buick EVs, having already made the investment on the GMC side for the equipment needed to sell the GMC Hummer. GM builds the Hummer at Factory Zero in Detroit and Hamtramck. It started trickling out to dealerships in late 2020.
In Northern Michigan, at Bishop Automotive Group, owner David Bishop said he plans to spend whatever is needed to sell Buick EVs at his Buick/GMC store in Clare.
“We’re doing all of the EV investments and we’re excited for all the products coming out,” Bishop said. “It’s an investment in the future, this is the way the industry is going and we’re going to be on the ground floor moving forward.”
Bishop said he has already made investments in EV tools for his Chevrolet store in Rogers City and at his GMC store in Cheboygan. Bishop said he will get the first Hummer pickup and SUV EVs delivered to his stores next spring and he has “over a handful of sold reservations” for those vehicles.
Buick’s Poppitt did not comment on whether Buick is worried that losing dealerships, especially in rural areas where there are fewer Buick stores overall, would result in a loss of sales. Instead, he said in an email, current Buick customers can take their vehicle to any Buick dealer for service and any GM dealer can perform emergency warranty work on Buick consistent with the cross-line warranty policy.
Contact Jamie L. LaReau: jlareau@freepress.com. Follow her on Twitter @jlareauan. Read more on General Motors and sign up for our autos newsletter. Become a subscriber.