'MR. BIG VOLUME'

Heard is Chevy's sales king — but many customers aren't cheering

Files of regulators, Better Business Bureaus bulge with tales of woe

J.R. Todd thought he bought a new Chevrolet Tahoe in 2003. But when he went to trade it in, he was told that the vehicle was leased -- and was way over its allotted mileage. Photo credit: CRAIG HARTLEY
Bill Heard calls himself "Mr. Big Volume," and the title seems appropriate.

He's the top-selling Chevrolet dealer worldwide and owner of the fourth-largest privately held U.S. dealership group. In 2006, that meant retail sales for Bill Heard Enterprises Inc. of 46,683 new vehicles, or 3,112 per dealership.

But Heard's critics — and there are many — say the Mr. Big Volume moniker more aptly reflects the volume of complaints against his 15 dealerships.

"They say they're the world's largest Chevy dealer, but they are also the most complaint-ridden dealership in our files," says Dan Parsons, president of the Better Business Bureau of Greater Houston & South Texas.

It's a pattern repeated across the seven states in which Heard does business. In the past three years, Heard's dealerships have generated 573 complaints with local BBBs. Most deal with advertising and sales practices, and the number reflects only those complaints that a BBB decided had sufficient merit to pursue.

Some of the allegations:

-- In 2003, J.R. Todd bought — he thought — a Chevy Tahoe from Bill Heard Chevrolet in Sugar Land, Texas. When he tried to trade it in three years later, he was told he was actually leasing the SUV. He sued, saying none of the documents he signed identified the deal as a lease.

-- The Georgia Office of Consumer Affairs has accused Heard of intentionally misleading consumers and is seeking a jaw-dropping $50 million in penalties.

-- In 2000, a Heard dealership outside Nashville mailed Spanish-language notices to 15,000 residents with Hispanic surnames, saying they had won airline tickets to destinations such as Hawaii and Florida. The disclosure that they had to pay for a hotel room to get the airline ticket was in English.

-- At the Nashville Better Business Bureau, complaints were so numerous at one point that a staff member was assigned full time to pursue complaints against Heard's local store.

And consumers weren't the only ones who were miffed. In 2006, General Motors threatened to yank Heard's franchise at one Georgia store after a flier labeled "urgent potential recall notification" was mailed to 10,000 Georgia consumers. The flier urged them to schedule a safety inspection. In fact, there was no recall; it was a come-on to get people in the door.

By the numbers
Since taking over his father's Columbus, Ga., Chevrolet dealership in 1961, Bill Heard Jr. has assembled one of the country's largest dealership groups. Here are some key figures about Bill Heard Enterprises Inc.
10: Ranking among Automotive News' top 150 dealership groups in 2006
46,683: Total new retail sales in 2006
$2.19 billion: Group revenues in 2006
15: Number of dealerships. (One Cadillac-Saab and 14 Chevrolet stores)
7: States with Bill Heard dealerships (Georgia, Tennessee, Florida, Alabama, Texas, New Mexico and Nevada)
3,700: Number of employees
Sources: www.billheardchevrolet.com, Automotive News Data Center, Georgia Trend magazine

Not unusual

Neither Bill Heard nor his representatives agreed to be interviewed. Heard's lawyer, Dent Morton, said in an e-mail to Automotive News that the number of complaints against Heard's dealerships aren't out of line, given the group's volume: sales of 70,000 new and used vehicles annually and service to 225,000.

"In most cases, we are the largest-volume dealer in the markets we do business in," Morton said. "With respect to the percentage of transactions versus the number of BBB complaints, we do not have more complaints than other dealerships."

But the Houston Better Business Bureau begs to differ.

In 2006, Heard's two Houston area dealerships retailed a combined 8,294 new vehicles. The BBB has received 184 complaints about the two stores in the past 36 months.

By comparison, Fred Haas Toyota World, the largest dealership in Houston, had 2006 retail sales of 6,463. It had 18 BBB complaints in the same 36-month period.

In 2004, flanked by General Motors CEO Rick Wagoner, left, and CFO John Devine, Bill Heard was honored as a GM Dealer of the Year.

Success story

William T. Heard Jr. was born Sept. 8, 1934, in Columbus, Ga., and began working in the auto business with his father as a teenager. After college and a stint in the Navy, Heard took over the family business in 1961 and renamed the Columbus dealership Bill Heard Chevrolet.

Then he started expanding. In the 1980s he opened dealerships in Atlanta, Houston and Huntsville, Ala. In the 1990s, he added stores in Nashville; Memphis, Tenn.; Orlando, Fla.; plus more outlets in Atlanta.

In 1993, Bill Heard Enterprises was listed for the first time as one of Forbes' 500 largest privately held U.S. corporations. Two years later, the company's annual sales topped $1 billion for the first time.

In 2004, GM gave Heard a Dealer of the Year award and the prestigious Jack Smith Leadership Award. The Smith award recognizes dealers who have attained the highest levels of sales and customer satisfaction in their region.

Kind words from LaNeve

At the Detroit auto show in January, Mark LaNeve, GM's vice president of vehicle sales, service and marketing, downplayed Heard's record of complaints. He said GM has worked with Heard and his employees to install "proper controls and management practices."

Such controls are important, LaNeve said, because Heard maintains a decentralized management system for his multiple dealerships.

LaNeve said GM is "comfortable" that Heard and his managers respond appropriately to consumer concerns. He declined to comment on specific complaints.

"Some of them are just accusations and aren't even true," LaNeve said. "But they have demonstrated very clearly to us that they are putting the processes into place ... to respond appropriately and really handle the customers in an excellent fashion."

The recall that wasn't

That's a much different tone than the one GM took with Heard little more than a year ago. In a November 2006 letter, GM threatened to terminate Heard's franchise at a Georgia store because of a flier it had sent a month earlier.

The flier, mailed to an estimated 10,000 Georgia residents, was labeled "urgent potential recall notification." The flier carried the logos of GM and its brands. It urged recipients to call a toll-free number to schedule a free 28-point vehicle safety inspection.

There was no recall. And the General was not pleased.

"Dealer's actions are an impermissible way to solicit warranty and recall repairs," GM wrote in its letter to Heard. "Further, Dealer is not authorized to initiate warranty, service or recall campaigns for any GM brands other than Chevrolet and Cadillac."

The letter asserted that Heard had breached GM's sales and service agreement. The automaker gave Heard 30 days to correct or explain those breaches.

GM's letter became evidence when the Georgia Office of Consumer Affairs accused Heard of intentionally misleading consumers in an effort to solicit business. In the lawsuit that followed, the office accused Bill Heard Enterprises of "repeatedly and knowingly" violating the state's Fair Business Practices Act.

The suit, pending in a Georgia state court, seeks civil penalties of $5,000 for each of the estimated 10,000 fliers. The Office of Consumer Affairs also is asking for a permanent injunction, meaning it could fine Bill Heard Enterprises up to $25,000 for each offense in the future without having to go back to court.

Big volumes, big problems
The country's largest Chevy dealer has gotten more than his share of customer complaints.

-- In 2003, a Texas man bought a new Chevy Tahoe from a Heard dealership outside Houston, only to find out a year and a half later that the the dealership considered the SUV to be leased.
-- A Tennessee man complained to the Nashville Better Business Bureau that a Heard dealership approved him for a loan, gave him the keys to the truck, then called about 7 months later to say the financing had fallen through.
-- At one point, the Nashville Better Business Bureau assigned a staff member full time to investigate complaints about Heard's store there.

Vendor gets the blame

Bill Heard Enterprises says it is being targeted unfairly. "We see questionable advertising every day that does not receive attention from governmental agencies," Morton, the company's lawyer, told Automotive News. "All of our advertising is approved for compliance by outside legal counsel and internal compliance staff prior to being released."

Morton also contended that GM never threatened to pull the dealership franchise and that the problem was caused by a vendor. He said the flier was mailed by an ad agency that had not received approval from the company's counsel.

The vendor acknowledged the error and "took full responsibility for not complying with our policy," he said. "We assured General Motors that this would not happen again, and that was the end of it."

In November, Florida Attorney General Bill McCollum fined two Bill Heard dealerships $400,000.

$50 million fine

The ad agency is not named as a party in the Georgia Office of Consumer Affairs' lawsuit against Heard. If that suit is successful, the $50 million civil penalty would be the largest ever paid by Heard. But it wouldn't be the first.

Since 1991, Bill Heard Enterprises has paid $280,196 in civil penalties, consumer restitutions and administrative expenses to the state of Georgia as a result of 15 actions by the Office of Consumer Affairs.

That amount includes a $188,000 civil penalty for allegedly false and deceptive advertisements that Heard agreed to pay in 2004. One year earlier, the company paid an $84,000 fine to the Office of Consumer Affairs for a similar offense.

Heard also has attracted the attention of Florida regulators. Last November, Florida Attorney General Bill McCollum slapped two Bill Heard dealerships in the Orlando and Tampa markets with a $400,000 fine as part of a settlement for print and radio advertisements that were alleged to be misleading.

It was the seventh time the attorney general's office had investigated Heard's Florida dealerships over issues such as customer service and inadequately disclosed prices and fees in advertisements.

At the time, the attorney general's office said it had fielded more than 100 consumer complaints about Heard's stores, all of which eventually were resolved. But a follow-up investigation by the Economic Crimes Division uncovered lingering issues related to poor customer service and failure to address consumer concerns.

McCollum's press secretary, Sandi Copes, says the attorney general's office has received 11 additional complaints about Heard's dealerships since the settlement was signed.

Vacation? Or coffee mug?

The trail of complaints continues to Tennessee. Heard's two dealerships there, one in suburban Memphis and a former Heard store in Antioch southeast of Nashville, have paid more than $183,000 in penalties. The fines were part of six settlements between Heard and the state's attorney general's office, the Motor Vehicle Commission and Office of Consumer Affairs.

In 2000, the Antioch dealership got in trouble for sending mailers to 15,000 residents with Hispanic surnames, telling them they had won money and round-trip airline tickets to such destinations as Hawaii and Florida.

The promotion was printed in Spanish, but the disclosures — including the fact that the recipient had to pay for a hotel room to receive the airline tickets — were in English.

According to the settlement, about 225 customers visited the dealership to claim their prize: an airline ticket discount booklet, a Bill Heard cap, a coffee mug and $5.

Bill Heard is a name well-known at the BBB of Middle Tennessee. A few years ago, the Nashville BBB had a full-time staff member dedicated to handling 100 to 120 complaints per year involving the Antioch dealership, says CEO Kathleen Calligan.

Heard sold the Antioch dealership last June, a few months after a local TV station broadcast a story about consumer complaints. It now operates under a different name with a new owner.

Morton told Automotive News that the Antioch dealership had been underperforming long before the TV report and that its sale was a business decision.

Regulators are chagrined

In settlement documents, court records and interviews with Automotive News, regulators and business watchdog groups expressed frustration, contending fines and government actions have had a negligible impact on Heard's business practices.

"When you get to the point where your business culture says, 'We'll take this slap on the wrist, because the financial reward is still great for us,' that violates everything that business is about," Calligan says.

She says the Nashville BBB had met with nine general managers who had run the Antioch dealership over 13 years.

Calligan says she also flew to Bill Heard headquarters in Columbus, Ga., to meet with Heard himself. Everyone promised to make changes, Calligan says.

"Mr. Heard always told me he didn't want that to be going on, that he wanted to run his dealerships the right way," she says. "We remain very disappointed that it wasn't backed up with action."

Jamie LaReau contributed to this report

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