General Motors has promised to go beyond what's required in the dealer agreement and in state franchise laws to help Oldsmobile dealers cope with the phase-out of their franchise.
In a Thursday, Dec. 14, letter to Olds dealers, group vice president Bill Lovejoy said the company will make cash payments available to all dealers, taking into account their investment and annual sales.
'We believe that our transition assistance package is extraordinary,' wrote Lovejoy. 'Our package is broadly designed to address each Oldsmobile dealer's specific concerns. It also goes beyond GM's contractual obligations under the dealer agreement and state laws.'
GM's cost could be enormous.
'There are more than 30 fairly comprehensive termination assistance laws,' said Dan Myers, a Tallahassee, Fla., lawyer.
'North Carolina requires a manufacturer to give a dealer 36 months rent or the equivalent. Pennsylvania says a manufacturer has to give a replacement franchise or pay fair market value of the franchise.'
Lovejoy said GM assistance includes:
Repurchase all new Oldsmobile vehicles regardless of model year. The dealer agreement only requires the company to buy back the current model year.
Remove and buy back more signage than is required under the dealer agreement.
Repurchase unused and undamaged parts and accessories, as outlined in the dealer agreement.
Buy back essential tools, as specified in the dealer agreement. Dealers can keep tools designed exclusively for Oldsmobile products.
The Lovejoy letter says the factory will phone each Olds dealer this week.
'There are still a lot of serious issues to discuss,' said Alan Sterling, president of Holiday Chevrolet Oldsmobile in St. Cloud, Fla., and GM line chairman for the National Automobile Dealers Association. 'We'll all be waiting by the phone.'