Post by Marc on Jan 25, 2005 14:57:52 GMT -6
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Death of Olds
Hoffman Auto and other dealers are suing General Motors for failing to compensate them for the end of the Oldsmobile
by Meir Rinde - January 20, 2005
When General Motors announced it was phasing out its century-old Oldsmobile brand, fans of the car complained bitterly and automotive historians recounted Oldsmobile's glorious, faded history.
"Everyone signed petitions, wrote personal letters, you know, expressed their feelings, and were unhappy about the whole thing," said Jeff Salinardi, a West Simsbury resident who heads a club for owners of Oldsmobile's 1970s muscle cars. "Some people sat by and said, 'Whatever they do, they do. What can you do about it?'"
The December 2000 announcement initially shocked Oldsmobile dealers, and then angered them. How could "the General" betray profitable relationships that had lasted decades?, they asked. Why had the company taken an esteemed product line and driven it into the ground? Some of them had spent large sums building and renovating their dealerships; would they be compensated? Would they simply lose their businesses, or would they get to sell the company's other cars?
"I've been here 14 years now, full time. I grew up in the business," said Scott Platt of Alderman Cadillac-Oldsmobile in Meriden. His family has sold the Olds line since 1942. "That's why it's such a disheartening thing. We all love Oldsmobile. Back in the '70s and '80s we sold a lot of cars."
To ease the pain of the shutdown, GM vowed to buy dealers out, setting aside half a billion dollars for settlements with its 2,801 Oldsmobile dealers. Four years later, the company says it has reached agreements with almost all of them. The last Oldsmobile, a cherry-red Alero with a special "Final 500" marking, rolled off a Lansing, Mich. assembly line last April, and new models are all but gone from showrooms and lots.
A few dealers, however, have not taken GM's buyout offer and continue to negotiate. The Hoffman Auto Group in East Hartford has taken the next step and sued, charging that the giant automaker went back on contractual promises to continue providing cars.
In a lawsuit filed last week in Superior Court, Hoffman says in November 2000, GM renewed dealer contracts to sell Oldsmobiles for another five years. Yet even as GM was talking up Oldsmobile's bright future, the company was working out the details of its demise, the suit alleges. Just a month after the new contracts were signed, the company dropped the bomb and killed off Oldsmobile.
"As a result of GM's conduct, [Hoffman] has, in fact, lost the complete value of its Oldsmobile franchise ... and will shortly have no Oldsmobile product to sell," the suit says. "GM has destroyed the entire good will and transferability of plaintiff's Oldsmobile franchise."
Rumors about Oldsmobile's impending fate swirled among dealers well before GM made its fateful announcement, but fans were shocked nonetheless.
Obituary-like news articles recalled how Ransom Eli Olds helped build a gas-powered carriage in 1895 and founded Oldsmobile in Lansing, Mich. two years later. The company was the first mass-producer of gas-powered cars, according to GM, which acquired Olds in 1908. A legacy of cutting-edge design is part of the reason Oldsmobile enthusiasts like Salinardi were so upset when the bad news came.
"It just seems like a piece of history ended," Salinardi said. "Oldsmobile has so many innovations that most people don't realize. It was the first car company to use chrome bumpers. When you think of old cars, you think of chrome bumpers. They invented the airbag. There are Oldsmobiles from the '70s with airbags. Anytime anything ends -- that's just shut down after 100 years as a corporate measure -- it's just sad."
But even Salinardi agrees that Oldsmobile had become a stodgy, middlebrow brand, out of favor with younger buyers despite GM's "It's not your father's Oldsmobile" ad campaign. Sales fell from a peak of more than one million cars a year in the mid-1980s to about 350,000 in 1999. Subsequent efforts to "reposition" the brand failed.
"The market has not responded as we had hoped, and Oldsmobile continues to be unprofitable," GM said in a statement. "The decision was difficult, but the management at GM feels strongly that it is the right course of action in order to sustain and strengthen our remaining portfolio of brands."
Hoffman Auto Group is only the latest dealership to sue GM over the proposed Oldsmobile settlements. The Tallahassee, Fla. law firm of Myers & Fuller has made a business of getting better deals for dealers who feel they were screwed.
"We have a huge group of dealers who spent millions of dollars on new facilities, renovated facilities and new franchises only to find that they had a hole in their plans called Oldsmobile," firm partner Dan Myers wrote in 2003. "The money offered was totally inadequate to compensate them and the only recourse left was a lawsuit."
Scott Platt chose to accept GM's settlement, but said he sympathizes with Hoffman and others who sued.
"They came in and said they were going to give you another franchise, or give you a settlement, and they did give you a settlement, but it wasn't enough to give you another franchise," he said. "They said they were going to replace your franchise with Buick, or GMC trucks, or Pontiac. But it didn't happen with us and it didn't happen with Hoffman.
"I know of dealers who made out pretty well," Platt added. "GM took care of who they wanted to."
Myers & Fuller didn't return phone calls. Hoffman Auto Group's owners and attorneys did not return calls or were unavailable for comment.
GM spokeswoman Rebecca Harris said only a "handful" of dealers nationwide haven't accepted a settlement. She said 95 percent of Oldsmobile dealers had another line of cars to fall back on, and said the decision to give a dealer a different brand to sell depended on the company's presence in the dealer's region.
"In the normal course of business, we say we need to input a GMC dealer in this location, or we need to buy back this dealership because this guy wants to retire," Harris said. "In those cases, we worked with Oldsmobile dealers one on one. Some were offered opportunities and some weren't."
She also said the automaker was honoring its contracts with Oldsmobile dealers through their expiration next November, and denied GM deceived dealers by hiding plans to shut down the brand.
"It's not true," she said. "It was a business decision made at the time of the announcement. There were no discussions prior to that. We're constantly evaluating the business-worthiness of all of our products. That's just part of business."
hartfordadvocate.com/gbase/News/content?oid=oid:96900
___________________
GM!!! BRING BACK OLDS!!!
Death of Olds
Hoffman Auto and other dealers are suing General Motors for failing to compensate them for the end of the Oldsmobile
by Meir Rinde - January 20, 2005
When General Motors announced it was phasing out its century-old Oldsmobile brand, fans of the car complained bitterly and automotive historians recounted Oldsmobile's glorious, faded history.
"Everyone signed petitions, wrote personal letters, you know, expressed their feelings, and were unhappy about the whole thing," said Jeff Salinardi, a West Simsbury resident who heads a club for owners of Oldsmobile's 1970s muscle cars. "Some people sat by and said, 'Whatever they do, they do. What can you do about it?'"
The December 2000 announcement initially shocked Oldsmobile dealers, and then angered them. How could "the General" betray profitable relationships that had lasted decades?, they asked. Why had the company taken an esteemed product line and driven it into the ground? Some of them had spent large sums building and renovating their dealerships; would they be compensated? Would they simply lose their businesses, or would they get to sell the company's other cars?
"I've been here 14 years now, full time. I grew up in the business," said Scott Platt of Alderman Cadillac-Oldsmobile in Meriden. His family has sold the Olds line since 1942. "That's why it's such a disheartening thing. We all love Oldsmobile. Back in the '70s and '80s we sold a lot of cars."
To ease the pain of the shutdown, GM vowed to buy dealers out, setting aside half a billion dollars for settlements with its 2,801 Oldsmobile dealers. Four years later, the company says it has reached agreements with almost all of them. The last Oldsmobile, a cherry-red Alero with a special "Final 500" marking, rolled off a Lansing, Mich. assembly line last April, and new models are all but gone from showrooms and lots.
A few dealers, however, have not taken GM's buyout offer and continue to negotiate. The Hoffman Auto Group in East Hartford has taken the next step and sued, charging that the giant automaker went back on contractual promises to continue providing cars.
In a lawsuit filed last week in Superior Court, Hoffman says in November 2000, GM renewed dealer contracts to sell Oldsmobiles for another five years. Yet even as GM was talking up Oldsmobile's bright future, the company was working out the details of its demise, the suit alleges. Just a month after the new contracts were signed, the company dropped the bomb and killed off Oldsmobile.
"As a result of GM's conduct, [Hoffman] has, in fact, lost the complete value of its Oldsmobile franchise ... and will shortly have no Oldsmobile product to sell," the suit says. "GM has destroyed the entire good will and transferability of plaintiff's Oldsmobile franchise."
Rumors about Oldsmobile's impending fate swirled among dealers well before GM made its fateful announcement, but fans were shocked nonetheless.
Obituary-like news articles recalled how Ransom Eli Olds helped build a gas-powered carriage in 1895 and founded Oldsmobile in Lansing, Mich. two years later. The company was the first mass-producer of gas-powered cars, according to GM, which acquired Olds in 1908. A legacy of cutting-edge design is part of the reason Oldsmobile enthusiasts like Salinardi were so upset when the bad news came.
"It just seems like a piece of history ended," Salinardi said. "Oldsmobile has so many innovations that most people don't realize. It was the first car company to use chrome bumpers. When you think of old cars, you think of chrome bumpers. They invented the airbag. There are Oldsmobiles from the '70s with airbags. Anytime anything ends -- that's just shut down after 100 years as a corporate measure -- it's just sad."
But even Salinardi agrees that Oldsmobile had become a stodgy, middlebrow brand, out of favor with younger buyers despite GM's "It's not your father's Oldsmobile" ad campaign. Sales fell from a peak of more than one million cars a year in the mid-1980s to about 350,000 in 1999. Subsequent efforts to "reposition" the brand failed.
"The market has not responded as we had hoped, and Oldsmobile continues to be unprofitable," GM said in a statement. "The decision was difficult, but the management at GM feels strongly that it is the right course of action in order to sustain and strengthen our remaining portfolio of brands."
Hoffman Auto Group is only the latest dealership to sue GM over the proposed Oldsmobile settlements. The Tallahassee, Fla. law firm of Myers & Fuller has made a business of getting better deals for dealers who feel they were screwed.
"We have a huge group of dealers who spent millions of dollars on new facilities, renovated facilities and new franchises only to find that they had a hole in their plans called Oldsmobile," firm partner Dan Myers wrote in 2003. "The money offered was totally inadequate to compensate them and the only recourse left was a lawsuit."
Scott Platt chose to accept GM's settlement, but said he sympathizes with Hoffman and others who sued.
"They came in and said they were going to give you another franchise, or give you a settlement, and they did give you a settlement, but it wasn't enough to give you another franchise," he said. "They said they were going to replace your franchise with Buick, or GMC trucks, or Pontiac. But it didn't happen with us and it didn't happen with Hoffman.
"I know of dealers who made out pretty well," Platt added. "GM took care of who they wanted to."
Myers & Fuller didn't return phone calls. Hoffman Auto Group's owners and attorneys did not return calls or were unavailable for comment.
GM spokeswoman Rebecca Harris said only a "handful" of dealers nationwide haven't accepted a settlement. She said 95 percent of Oldsmobile dealers had another line of cars to fall back on, and said the decision to give a dealer a different brand to sell depended on the company's presence in the dealer's region.
"In the normal course of business, we say we need to input a GMC dealer in this location, or we need to buy back this dealership because this guy wants to retire," Harris said. "In those cases, we worked with Oldsmobile dealers one on one. Some were offered opportunities and some weren't."
She also said the automaker was honoring its contracts with Oldsmobile dealers through their expiration next November, and denied GM deceived dealers by hiding plans to shut down the brand.
"It's not true," she said. "It was a business decision made at the time of the announcement. There were no discussions prior to that. We're constantly evaluating the business-worthiness of all of our products. That's just part of business."
hartfordadvocate.com/gbase/News/content?oid=oid:96900
___________________
GM!!! BRING BACK OLDS!!!