Cadillac is offering 400 of its smallest dealers a buyout if they don't want to be part of the ambitious and contentious Project Pinnacle.
Automotive News reports the offers will range from $100,000 to $180,000. The dealers eligible for the buyout sold less than 50 new Cadillac models in 2015. While the 400 dealers make up 43 percent of Cadillac's total number of dealers in the U.S. (around 925), this group only made up 9 percent of total sales last year.
Cadillac President Johan de Nysschen said the buyouts is to give those an alternative who don't want to forward with the new program.
“This is going to be a long, arduous and challenging journey and certainly not one for the faint-hearted. Some people may choose to make life a little easier than what lies ahead,” said de Nysschen.
de Nysschen did say while Cadillac has too many dealers compared to their rivals, the buyout program isn't meant to be seen as a way to get rid of low-volume dealers.
Project Pinnacle is a new incentive program that will separate dealers into five tiers based on sales volume. Each tier offers a varying level of customer perk along with different requirements for services and facilities. For example, small stores cannot stock vehicles on site. Instead, they would offer a virtual showroom for customers to explore and order a vehicle. This program has gotten backlash from dealer groups, saying it would violate franchise laws and be unfair to the smaller dealers.
Those who have been offered the buyout have until November 21st to either take it or move forward with Project Pinnacle, which is expected to begin January 1st.
Source: Automotive News (Subscription Required)