Steve Zabawa was climbing a mountain in Peru in July when he got a call from General Motors asking whether his Rimrock Auto Group wanted to buy Fichtner Chevrolet near Billings, Mont. GM's message, according to Zabawa: "We'd rather have you represent it than the current buyer."
That current buyer? Crosstown rival and former NADA Chairman Bill Underriner, who, back in Billings, was unaware his deal was about to crater. He didn't find out GM would use its right-of-first-refusal option to assign the sale to Rimrock until the transaction reached its approval deadline the next month.
"I'm not very happy," Underriner told Automotive News. "I felt that I got strung out."
GM won't talk specifics about the transaction. But the way the deal unfolded triggered upset feelings for both seller and original buyer and accusations that GM lied. Compounding the tension: Years of trying to get the Buick and GMC franchises together under one roof in Billings and recent dealership renovations for both Underriner and Rimrock.
Underriner runs a Buick franchise in Billings and opened a new $6 million Buick-Volvo-Hyundai dealership in July. Rimrock sells GMC and opened a new $7.5 million GMC-Cadillac store "with room for Buick" in February, Zabawa said.
Both dealers say GM has pushed for a buyout from one or the other for at least a decade as part of its Buick-GMC channeling strategy. There were times each dealer thought he was close to a deal, but nothing ever materialized.
"We're two hard-headed buyers in the marketplace, and nobody's the seller," Zabawa said.
A GM spokeswoman and a GM regional dealer representative declined to confirm or comment about Zabawa and Underriner's version of the events. But "the right of first refusal is part of our dealer contract," said Jeff Harbach, GM's western area manager for dealer network development. "So when dealers sign their sales and service agreement, they know it's a possibility."
Underriner struck a deal to buy the Chevy store from owner Leonard Fichtner in May. The store and his own dealership were 8 miles apart, and Underriner wanted a truck line. Zabawa said he'd made his own, lower, offer for Fichtner Chevrolet earlier in the year.
On Aug. 4, Underriner found out he'd lost the deal to Rimrock. That was GM's final day to exercise the option or approve the transaction, according to Underriner. In addition to a manufacturer letter, a GM representative visited him at his Buick-Volvo-Hyundai store that day and told him a Hispanic woman would buy the Chevy dealership.
A month later, someone from GM admitted to him that minority dealer development wasn't why the automaker exercised right of first refusal, Underriner said. The person wouldn't give Underriner a reason, he said.
"So I was lied to by GM," Underriner said. "I'll say that: I was out and out lied to by GM."
There is a Hispanic woman in the mix: Ann Soares, who is married to Zabawa's Rimrock partner, John Soares.
Ann Soares, a top manager at Rimrock, is going through training to be dealer principal at the Chevrolet store, Zabawa said.
It's not going to happen overnight, but "she'll do a great job as a dealer," Zabawa said. "GM, they want to have more females, more Hispanics and more diversity."
While that played a role in GM's assignment of the deal, it wasn't the only factor, he said.
"GM feels that we would sell more cars than Bill would have," he said. Underriner wasn't hitting Buick's sales targets for his store, Zabawa said. But Underriner says he is on track with expectations, averaging six new Buick sales a month.