Reynolds and Reynolds Co. could have become the exclusive provider for dealer e-business technology at General Motors.
But both parties last week announced they could not reach an agreement that would have given the automaker a 10 percent equity stake in the longtime supplier of dealer management systems. Reynolds is somewhat relieved.
'I think that in many ways it has kind of lifted a cloud or made it clear that Reynolds and Reynolds is a neutral company and that we aim to be the leader in automotive retailing regardless of brand,' said Buzz Waterhouse, who was promoted by the Reynolds board from COO to CEO last week.
'If anybody had concerns about that, I think those concerns are now gone.'
GM and Reynolds, of Dayton, Ohio, had been negotiating since April 20. GM would have purchased a stake in Reynolds, valued at about $200 million.
But other automakers, non-GM dealers, and even some GM dealers expressed concern about the proposed deal, Waterhouse said.
GM said it broke off negotiations. Reynolds said it was a joint decision.
'We never really saw the commitment from General Motors to it,' Waterhouse said.
GM and a dealer task force found Reynolds' proposals to be unworkable in terms of overall value for GM and its dealers, said Darwin Clark, GM vice president and general manager of industry-dealer affairs.
'This termination applies only to this specific set of negotiations,' Clark said. 'Any other business agreements we have in place with Reynolds are not impacted by this action at all.'