Angry prospective Mahindra dealers are stepping up their fight against the Indian pickup manufacturer, joining a lawsuit over their stalled franchises and taking their complaints to state officials.
On April 17, Jerry Ackerman, who paid $450,000 for three Mahindra franchises, filed suit in U.S. District Court in St. Louis, alleging breach of contract by both Mahindra & Mahindra Ltd. and its independent U.S. distributor, Global Vehicles U.S.A. The suit asks for a refund and for punitive damages.
Ackerman's lawsuit seeks class-action status to represent all of the approximately 350 dealers who signed up for U.S. franchises, says John Toma, Ackerman's lawyer. Toma is working with Sacramento, Calif., lawyer Stuart Talley to bring other franchisees into the lawsuit. Talley says he has been contacted by 45 Mahindra dealers who want to become parties in the lawsuit.
The dealers have been waiting three years for Mahindra to bring its India-built compact diesel pickup to the United States. Last year Mahindra ended its agreement with Global Vehicles, of Atlanta. Global and its franchisees were left without a product.
The franchises are directly with Global Vehicles, which has been pressing its own legal case against Mahindra. In recent weeks, some dealers have contributed to a legal defense fund to support Global Vehicles as it awaits arbitration this year in London.
On another front, a group of 70 Mahindra dealers who met in Atlanta last month to discuss coordinated legal action now intend to file complaints against Mahindra with their individual state motor vehicle law enforcement agencies, according to one of the group's organizers, New Hampshire dealer Joseph Yergeau.
Yergeau, a Manchester, N.H., Buick, Cadillac and Mercedes dealer, says he has filed a complaint against Mahindra with New Hampshire authorities.
State motor vehicle agencies have enormous power over the way automakers can operate in their states.
"Our beef is with Mahindra, not Global," Yergeau says. "Mahindra refuses to talk to us. But at some point, they're going to have to deal with their dealers."