Sometimes the wheels of justice don't turn quite right.
Recent legal decisions have allowed Don Hudler, former chairman of Saturn Corp., to purchase six Saturn stores in Texas.
There's nothing wrong with factory executives wanting to retire to the retail business. And Hudler likely will be a good dealer. But the approach that Saturn and Hudler took created a precedent in Texas that enables manufacturers to get around a tough franchise law designed to prevent favoritism. And it abused a financial arrangement generally reserved for minorities and novices.
Last December the Texas Motor Vehicle Board granted Hudler dealer licenses for three stores in Houston and three stores in Dallas. In April a federal appeals court denied two Houston Saturn dealers the chance to challenge the Hudler sale before the Texas Motor Vehicle Board or in court. The court ruled that the case must go to arbitration and, as a result, the dealers gave up their case.
In both instances, a strict franchise law failed to do what it was designed to do: prevent factories from investing in the retail business and showing favoritism to their operators.
Fernando Somoza and Kirk Franceschini, co-owners of Paramount Saturn Ltd. of Houston, challenged the sale to Hudler. Somoza and Franceschini say they had an understanding with Saturn that they would buy three Houston stores.