Oldsmobile death slow, painful for dealers

Special circumstances
GM will give Oldsmobile dealers financial help if


  • There was new construction during the last five years

  • There were major renovations in the last five years

  • Buy/sells were entered and submitted to GM from Jan. 1, 1999 to Dec. 12, 2000

  • There are significant long-term fleet contracts

  • John Parker, president of Skyland Automotive Inc. in Asheville, N.C., thought he had a solid case for extra financial assistance under the Oldsmobile phaseout.

    Parker bought his partner's share of an Oldsmobile store just two weeks before General Motors said on Dec. 12 , 2000 that Oldsmobile would be discontinued. He also spent $700,000 renovating an Oldsmobile-Mazda dealership in 1997.

    GM told dealers they could receive extra assistance for major renovations within five years of its phaseout and buy/sell agreements entered and submitted to GM from Jan. 1, 1999 to Dec. 12, 2000.

    But GM rejected Parker's application.

    "I don't understand this," Parker said. "It is like these guys are reading from a script, and they keep going around in circles."

    Some dealers are stunned

    Parker is not alone. Nearly a year after GM said it would pull the plug, some dealers remain stunned over the loss of Oldsmobile. Many are torn between a need to recoup a reasonable share of their Oldsmobile investment and a desire to avoid a lawsuit. Others have settled to avoid the expense of litigation.

    GM spokeswoman Marcia McGee said about 80 percent of the dealers applying for termination assistance are opting for the standard package. But the dealers who have invested hundreds of thousands of dollars - even millions - in the Oldsmobile franchise are a tough sell.

    William Bradshaw, the National Automobile Dealers Association line chairman for GM, said most of the Oldsmobile dealers who have contacted NADA are dissatisfied with GM's compensation for the Oldsmobile franchise. Some think the process has been arduous and slow.

    "Oldsmobile dealers as a whole remain dissatisfied, especially with GM's lack of flexibility and its handling of special circumstances," said Bradshaw, owner of Bradshaw Chevrolet-Buick-Cadillac in Greer, S.C. "To be fair, GM has to be flexible."

    Rigid formulas

    Dealers said GM is particularly deaf to owners with dual franchises, assuming a store that drops Olds can rely on other makes to survive. Dealers also have complained that the company rigidly applies formulas to determine compensation, instead of taking appeals for special treatment on a case-by-case basis.

    "We disagree with the dealers who say we have been slow," GM's McGee said, adding that a procedure for handling special cases is in place to speed the process.

    She said of 2,801 Oldsmobile dealers, 963 have signed agreements to end their Oldsmobile franchises, and 350 more are completing termination agreements. McGee said the company is not keeping track of the special appeals it has rejected.

    McGee thinks GM has been responsive to dealers. The company, for example, has agreed to hold an Oldsmobile make meeting to address dealer concerns during the NADA annual convention in January. Previously, no make meeting was planned.

    "We were hoping to get a whole lot more," said Allen Rippy, vice president of Rippy Cadillac-Oldsmobile Inc., of Wilmington, Del., who signed an agreement to end his franchise. "But we want to continue to have a good partnership with GM."

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