DETROIT - While some automakers fight the acquisition of their dealerships by AutoNation USA, General Motors sees advantages to the rapid expansion of H. Wayne Huizenga's empire.
GM wants to reduce its dealer count and boost its presence in geographic areas where GM sales are weak, such as California.
Rick Wagoner, president of GM's North American Operations, said AutoNation can help the automaker on both fronts.
'We have some dealers who want out,' Wagoner said. 'This is a way to get them out in a way that's helpful to us. I think it's a pretty convenient setup for all parties,' Wagoner said.
'The principals (of AutoNation) have a track record of doing well in different types of businesses, and they obviously have lined up a lot of capital. I'm not sure what we gain by fighting that.'
AutoNation is a unit of Republic Industries Inc. of Fort Lauderdale, Fla. Huizenga, a billionaire entrepreneur who built the Blockbuster video chain, is co-CEO of Republic.
Of AutoNation's 108 franchises, 22, or 20.3 percent, are GM stores. AutoNation holds 28 Ford Motor Co. and 16 Chrysler Corp. franchises.
Two weeks ago American Honda Motor Co. Inc. sued Republic in U.S. District Court in Los Angeles to prevent AutoNation from exceeding the limits Honda places on Honda and Acura store ownership. Toyota Motor Sales U.S.A. and Saturn Corp., a unit of GM, are also trying to block or at least slow down Republic's acquisition of their stores.
Wagoner said GM would limit the number of stores Republic can buy, but he declined to be specific.
Wagoner said 60 to 70 stores is about the maximum that anyone has successfully run, referring specifically to megadealer Rick Hendrick, who owns 69 dealerships.
'Up until his illness, he (Hendrick) probably worked 150 hours a week, so you still had an individual hand,' he said.
'We don't know how many stores AutoNation can run, but they're not going to have 500 GM stores before we find out that it doesn't work.'