General Motors has settled a lawsuit by two former dealers who alleged that GM's minority dealer program is deceptive and discriminatory.
GM says it reached settlements last month with Ricardo Sanchez, who is Mexican-American, and Chandler Lee, who is black. As part of the settlement, terms were not revealed.
GM spokeswoman Deborah Silverman said in an e-mail message to Automotive News that the two plaintiffs dropped the suit, "one after most of his claims were dismissed by the court and the other after counterclaims were asserted against him."
The ex-dealers filed their suit in a New Jersey federal court in February 2005. Both had obtained dealerships under GM's minority dealer program. They accused GM of withholding information about the stores' financial troubles.
The plaintiffs also alleged that GM terminated more than 100 minority dealers in recent years. They failed to get their case certified as a class action.
Former GM dealers James Dalton and Theldon Branch, both of whom are black, also had been plaintiffs in the suit but withdrew before the case was settled.
The National Association of Minority Automobile Dealers has criticized GM for removing failing dealers from stores. The group says minority dealers cannot survive in the "chaotic environment" created by GM.
GM has hired Weldon Latham, a Washington lawyer and diversity specialist, to examine its minority dealer program. He is to deliver a preliminary review this spring and a final report by year end.
At the end of 2005, GM had 357 minority-owned dealerships. That was down from 382 at the end of 2004. GM has about 7,200 U.S. dealerships.
You may e-mail Arlena Sawyers at [email protected]