Editor's note: Update deletes references to GM Financial and its relationship with Manheim.
About four years after a spat strained their business relations, General Motors and auction company Manheim are starting to kiss and make up.
The companies aren’t eager to discuss the origins of the dispute, but the result was a near-boycott of Manheim auctions by GM, which uses auctions to dispose of its company cars.
Before the dust-up, GM sent its cars and trucks through the lanes of 15 Manheim auction sites. Afterward, only two Manheim auctions continued to get those vehicles: Manheim Detroit and Manheim Denver. Other auction companies benefited from the diverted volumes.
About that same time, then-Manheim boss Dean Eisner left the company. I don’t know the details behind his departure, but I’m guessing that if one of your biggest customers pulls his business, that can’t be good for your career.
Closed sales return
But now the two are rebuilding their ties. On Monday, Manheim put out a press release saying that GM is bringing back closed sales -- auctions open only to franchised new-car dealers who sell GM brands -- to two Manheim auction sites: Manheim Arena Illinois, in the Chicago suburb of Bolingbrook, and Manheim Pennsylvania, southeast of Harrisburg.
The latter is huge -- literally. It’s the biggest auto auction in the world, with 33 lanes on more than 400 acres.
Sandy Schwartz, who now heads Manheim, told me during a visit to Manheim Detroit on Thursday that all through the dispute, Manheim auctions probably still had more GM vehicles than other auctions simply because Manheim is so big and other consigners, from financial institutions to wholesalers to rental companies to individual dealers, kept sending their Caddys, Chevys and other GM cars and trucks to Manheim lanes.
Schwartz was his usual upbeat self in predicting that after resuming closed sales at two Manheim locations, GM will add more. “I’m confident they’ll get back” to their prior footprint at Manheim auctions, he said.
That was the tone of the official press release, too.
“We value our partnership with Manheim,” Dan Kennedy, GM’s national remarketing manager, said in the statement. “We are confident that these closed sales at Manheim Arena Illinois and Manheim Pennsylvania will help our franchise dealers maintain their pre-owned vehicle inventories.”
Manheim cooed back. “Our organizations have had a long history of working together, and we’re excited to enter into this partnership,” said Mike McKinney, regional vice president of East Region Operations, in the same release. “We’re delighted that General Motors has brought closed sales back to Manheim.”
I’ll bet. Being shunned, even if only partially, by a consigner the size of GM can’t be good for an auction.
I’m guessing rival auctions aren’t as delighted.