Big changes to Cadillac's Pinnacle Program - Threatens Trunk Money

Cadillac has proposed big changes to its Pinnacle or "trunk money" program, announced at the recent NADA convention, The changes include opportunities for dealers to earn partial bonuses for coming close to their monthly sales targets, plans to make some payments sooner and the relaxing of some standards. Cadillac also said it has created an appeals process for dealers who are ruled to be short of brand standards. Yet Cadillac has not finalized the program, even though it is scheduled to become effective April 1st.

Will Churchill, chairman of the Cadillac National Dealer Council, said, "When it's finished, we'll be able to look at it, and then we can say, "Yes, we're 100 percent supportive' or, "We're not.'" Churchill, who learned of the changes only the night before Cadillac's Jan. 28 make meeting here, said some standards are being made "more realistic inside the business atmosphere that we're in." In addition, dealerships that achieve at least 85 percent of their sales target will earn some bonus money.  

The brand is trying to minimize dealerships' cash-flow implications during the transition by giving out credits sooner. The program is designed to make dealerships more profitable and elevate the brand's image among consumers. Cadillac Brand chief,Johan de Nysschen said"We want to make the program work," de Nysschen said, "The program succeeds when we put money into the pockets of our dealers. It fails if we don't." He said he expects some dealerships will not meet the standards for their designated tier initially but that most would within about six months. "Dealers learn very fast when they're out of the money," he said. This is a very serious intrusion into how dealers have to rely on the OEM for this incentive ("trunk") money!

Stay tuned!