A group of Chicago dealers has filed a class-action lawsuit to prevent General Motors from taking control of $500 million in local advertising funds.
In the suit filed last week in Cook County (Ill.) Circuit Court, 60 dealers challenged GM's decision to withhold the money from its dealer marketing groups. The automaker collects the money with a 1 percent fee on each car and truck sold.
Starting April 1, GM plans to transfer control of that money to its five regional general managers. The dealers are seeking a court injunction to block the transfer of funds, plus an expedited ruling to avoid paralyzing local marketing campaigns by GM and its dealers.
The Chicago dealers argue that the money should belong to the dealer marketing groups, who typically group themselves according to brand and sponsor ads for their metro regions.
General Motors claims this system creates a disjointed marketing message, with little coordination between the dealer ad groups and GM's national advertising.
But the Chicago dealers fear that GM-controlled local ad campaigns will be generic and ineffective. Moreover, the dealers worry that GM's regional general managers might transfer ad dollars from strong GM markets - such as Chicago - to areas where GM is weak.
'We want the court to rule that it is dealer money, and that GM can't use it without permission,' said Samuel Skinner, an attorney representing the Chicago dealers.
General Motors had no immediate comment on the suit.