Oldsmobile
dealers unhappy with General Motors’ suggested pay-offs are gearing up for a legal
battle with the giant automaker, the Detroit News reports.
GM announced in December that it will phase out the brand and has since made
a so-called “transition” offer to each of the 2,800 U.S. dealers.
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According to the Detroit News each outlet will get between $US1,500 and $US2,400
per Oldsmobile vehicle sold during its best year since 1998. Dealers average
103 vehicles a year, but big metropolitan outlets move 500 or more a year.
The newspaper says that a dealer selling 500 vehicles a year could get $US750,000
to $US1.2 million. Dealers with exclusive Olds dealerships or whose overall
sales are 75 percent or more Olds vehicles would get the higher payout.
But dealers contacted by the Detroit News say they’re not happy with the offer
as it doesn’t take account of recent investments or renovations nor, in the
case of the 63 sole dealerships, the fact that the end of Olds could be the
end of the business.
One metropolitan Detroit dealer, for example, told the paper that there are
no new franchises to be had in his area, which is what he calls “a mature market”.
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By GlobalDataThe Detroit News says that GM has set aside $US583 million to compensate Olds
dealers and that it is listening to dealers’ complaints. "The formula is
basically a first step, but there are special circumstances," GM spokeswoman
Marcia McGee told the paper.
But, its report noted, the assurances haven’t kept Olds dealers from preparing
for the worst. Some 200 have retained Myers, Forehand & Fuller, a high-powered
law firm in Tallahassee, Florida, that specialises in dealer matters.
Partner Daniel Myers believes GM will eventually pay out enough to satisfy
most dealers.
But with so many different circumstances, it will be impossible to please everyone,
he told the Detroit News.
"There will be lawsuits, but I don’t think there will be a lot of them,"
Myers said.
