General Motors is negotiating to buy a network of dealerships owned by major Cadillac dealer Don Massey.
According to two dealers familiar with the talks, GM has been negotiating with Massey for several months. Massey would stay on as manager after the sale is consummated, they said. A deal is expected shortly.
Massey already sold three Saturn dealerships to Saturn Corp. in December and sold one Cadillac dealership back to GM this month.
Cadillac spokesman Chris Preuss declined to comment, and Massey did not return phone calls from Automotive News.
Over the years, Massey developed a reputation for innovative - even unconventional - marketing. He bought up stores around the country and is Cadillac's biggest retail dealer.
A self-made man, Massey, 70, was raised in Tennessee. He moved to Michi-gan in 1955 and soon got a job selling cars. In the early 1960s, he operated a used-car lot in Wayne, Mich., and opened his first Cadillac dealership in Plymouth, Mich., in 1966.
A sale would give GM an opportunity to ensure a smooth transition when Massey is ready to retire. Although several family members are involved in the business, sources say no one has emerged as a likely heir.
The Massey empire is huge. According to the Automotive News 1998 Market Data Book, Don Massey Cadillac Group is the nation's 24th largest dealer group, with retail sales of 15,913 new vehicles in 1997.
Given Massey's combined sales of $909 million in 1997, only a few large dealers could afford to buy the entire network of stores.
But if GM buys out Massey, GM could sell Massey's dealerships one by one. In fact, GM recently transferred Massey's Cadillac franchise in Ann Arbor, Mich., to Goodman Automotive Group, also in Ann Arbor. Massey had 18 dealerships at the end of 1997.
Massey's three former Saturn franchises, which Saturn Corp. bought in December, are in Plymouth, Okemos and Farmington Hills, Mich. They could be bundled into the Saturn Retail Enterprise.
GM IS SILENT
This year, Saturn hopes to launch a publicly owned chain of 50 to 75 Saturn stores, with headquarters in Charlotte, N.C. That will enable Saturn Corp. to spin off the 29 dealerships it now owns.
Although GM is not talking about its plans for Massey's stores, one prominent Cadillac dealer predicted that GM has no desire to create a chain of factory-owned Cadillac dealerships.
'I don't believe GM would keep them,' said Ed Nimnicht, owner of Nimnicht Cadillac in Jacksonville, Fla., and last year's chairman of GM's National Cadillac Dealer Council. 'And I don't see GM trying to do something like Saturn' - that is, spinning off a chain of publicly owned Cadillac stores.
Instead, GM is likely to transfer the franchises to established dealers in each market. That would help Cadillac reach its goal of reducing its dealership ranks from about 1,500 dealerships to about 700.
'You've got to buy some people out,' said Nimnicht. 'This is part of it.'