MAUMEE, Ohio - Oldsmobile dealer Mike Mahaffey remembers it well. As he ironed a fresh shirt for work on Dec. 12, he heard on TV that GM was planning to kill Oldsmobile.
His reaction: 'Oh my God.'
Four months after GM signed Oldsmobile's death certificate, Mahaffey, 46, is no longer in shock. In fact, while many Oldsmobile dealers complain and threaten to sue, he is moving on with little fuss.
He accepted a buyout from GM, closed the Oldsmobile store and leased the space on a busy corridor in this Toledo suburb to a Ford dealer. Mahaffey continues to operate a larger Honda dealership next door.
Of 55 employees at the former Oldsmobile store, Mahaffey retained five. He helped 48 others find positions at other dealerships, including his new Ford neighbor.
Despite the deft transition, the loss of Oldsmobile took a toll on Mahaffey.
'It's been very frustrating, and (I've had) a lot of sleepless nights over this,' he says. But he shrugs his shoulders as he explains it is a situation that he must deal with.
Mahaffey says because the situation is out of their control, he will hand out $500 checks at the end of the year to everyone who was on the payroll as of last Dec. 9.
Invariably, Mahaffey has a smile on his face and an upbeat lilt in his voice as he speaks from his loft-like office above the Honda showroom. His eyes, though, show the strain of what he calls a decision by GM that came from nowhere.
Mahaffey goes back many years with Oldsmobile.
After working as controller at Hatfield Oldsmobile and Honda for 18 years, Mahaffey attained his goal of becoming the full owner of the business three years ago. With almost $15.7 million in sales in 2000, Hatfield Oldsmobile was No. 1 in Ohio last year. He sold 650 new Oldsmobiles last year. Total sales for both dealerships were $58 million.
GM says that so far, owners of 15 Oldsmobile dealerships have accepted buyouts and closed. Another 50 intend to take the buyout and have filed paperwork with GM. At the start of the year, there were 2,800 Olds dealerships.
Many dealers say GM's buyout offer is inadequate. Under the offer, Oldsmobile dealers receive between $1,675 and $3,100 for each Oldsmobile sold in the store's best year from 1998 through 2000. The larger the Oldsmobile share of a dealership's total sales, the greater the per-unit payment.
Mahaffey declined to reveal the amount of his settlement.
Ford moves in
Only 18 months ago, Mahaffey invested nearly $700,000 to renovate the Oldsmobile showroom and service areas. He says about half that cost was picked up by GM.
Now, workmen are gutting the interior, transforming it into a Ford dealership. A sagging banner that says Brondes Ford of Maumee isn't large enough to cover the two Oldsmobile logos molded into the concrete facade.
A 'Hatfield Oldsmobile Value Rated Used Cars' sign still dominates the curb along busy Reynolds Road, and a 'Goodwrench Service Plus' sign hangs above the service department entrance.
Mahaffey let his Oldsmobile inventory dwindle down to five vehicles before he closed shop. He said he sold those at cost to another Toledo-area Oldsmobile dealer.
While the lease to Brondes Ford will generate income, Mahaffey says there have been small, but important conflicts with his new tenant. The most divisive sticking point was how to carve up all-important lot space on the 10-acre site. Each dealer has several hundred vehicles to display.
Mahaffey says he and his counterpart, Phil Brondes, created a mutually acceptable line of demarcation and sprayed red paint on the asphalt to mark it.
Nevertheless, the Explorers, Escapes, Expeditions and Tauruses that Brondes expects to begin selling early next month are only a few feet from the Accords, Civics and Odysseys on Hatfield's side of the lot. In fact, customers entering the property from one side of the corner lot must drive past the Hondas to reach the Fords.
Mahaffey says he's not worried about competition, surmising Honda and Ford attract two different types of buyers.
Selling Hondas isn't enough for Mahaffey, however. He is considering the purchase of either a Chrysler-Dodge-Jeep or Chevrolet dealership in the Toledo area, although he's leaning toward the Chevrolet store, which is larger and closer. He says GM North America President Ron Zarrella tipped him off about the dealership's availability.
As his business grows, Mahaffey sees at least two of his three children becoming involved as they grow up. His 12-year-old son, Hunter, helped build his office and is interested in joining the team. Mahaffey calls his 16-year-old daughter, Elise, a 'master marketer' who would be 'the most successful sales manager ever known.'
Feeling of loss
As Mahaffey plans his next move, his employees are still reeling from the rapid changes. Finance Manager Steve Yoos, 26, says it is taking him a while to 'soak it all in.' The two-year employee's face hardens when he speaks of the loss of Oldsmobile, saying 'I don't agree with the decision.'
He has no particular brand loyalty, however, having previously worked at Kia, Mitsubishi and Hyundai dealerships in Peoria, Ill.
Phil Huckaba, an 11-year employee is taking the turn of events harder, calling it a personal loss.
Mahaffey still thinks back to that morning in December when he got the news about Oldsmobile's demise as he smoothed the wrinkles from his shirt. Only now, instead of shock, he believes through hard work and a bit of luck, he'll soon have everything all ironed out.