GM Offers Buyouts to 400 Cadillac Dealers

By Mike Colias and John D. Stoll 

General Motors Co. is offering 400 of its smallest Cadillac dealers a modest buyout as the luxury brand's management team looks to reshape the image to better compete with rivals.

The auto maker is offering as much as $180,000 in "transition assistance" to U.S. dealers unwilling to invest in a set of new standards recently introduced by Cadillac Chief Johan de Nysschen. Cadillac has 925 dealers, and the 43% being offered a buyout typically sell fewer than 50 models a year.

Dealers were informed of the buyout plan Friday morning. They have been working with GM management on a brand overhaul for several months.

A spokesman said the buyouts are optional. Cadillac sales have fallen far behind German auto makers and Toyota Motor Corp.'s Lexus in the U.S. in recent years despite substantial investment in the product line. Mr. de Nysschen has said changes need to be made to the retail network and rolled out a controversial plan called Project Pinnacle to address how dealers do business.

BMW AG, Daimler AG's Mercedes-Benz, Audi AG and Lexus have about a third as many dealers in the U.S. The specifics of the buyout program were first reported by Automotive News.

Write to Mike Colias at [e-mail] and John D. Stoll at [e-mail]

(END) Dow Jones Newswires

September 23, 2016 15:20 ET (19:20 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.