Seven auto dealers have filed suit for unspecified damages against Subaru of New England Inc. and its owner, distributor Ernie Boch, accusing Boch of packing cars with unwanted options and generally pushing dealers around.
The dealers - five current and two former Subaru dealers - claim that Boch's actions qualify as racketeering. Through a spokesman, Boch replied that the suit was politically motivated.
Boch is based in Norwood, Mass., and is lobbying hard against a bill before the Massachusetts Legislature that would restrict manufacturers' and distributors' control over dealers further. Two of the plaintiffs are from Massachusetts.
The Subaru distributorship serves 56 dealerships in the six New England states.
'As we view it, the timing of this lawsuit is no coincidence. They want to embarrass him, and distract him from this bill. Mr. Boch is really fighting this bill because he sees it as anti-competitive,' said Phil Lustbader, vice president of operations for Subaru of New England.
Lustbader is the former general counsel for Subaru of America Inc., the U.S. sales and marketing arm in Cherry Hill, N.J. Subaru of America controls distribution for most of the rest of the country. Lustbader said he joined Boch, one of the nation's last independent distributors, about a year ago.
Dealerships represented in the lawsuit are:
Subaru of Claremont in Claremont, N.H.
Subaru of Wakefield in Wakefield, Mass.
Bald Hill Subaru in Warwick, R.I.
Kinney Motors in Rutland, Vt.
Reynolds Garage & Marine Inc. of Lyme, Conn.
Both of the former Subaru dealerships had Subaru franchises until last year. They are:
George Lussier Enterprises Inc. in Manchester, N.H.
Camilleri Brothers Inc. in Holyoke, Mass.
The lawsuit was filed March 5 in U.S. District Court in Manchester, N.H. It claims Subaru of New England packs cars with an average of $480 worth of unwanted options.
The dealers also claim that Subaru of New England keeps dealers in line by withholding allocations of popular models, by imposing unreasonable capitalization and floorplan requirements and by insisting on the right of first refusal before a dealership can be sold.
Said Lustbader in a phone interview on Friday, March 19: 'The whole thing is completely without merit.'