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Published: Thursday, 6/10/2010

Area GM dealers revved as franchises return

BY LARRY P. VELLEQUETTE
BLADE BUSINESS WRITER

"I'm a happy man," said Matt Bell, owner of Greg Bell Chevrolet-Cadillac in Adrian. Mr. Bell began receiving new ordered 2010 model Cadillacs this month after his franchise was restored by GM, ending a scheduled binding arbitration between the dealer and the automaker. "Our customers were ecstatic," he added.

GM restored several franchises in recent weeks, including Cadillac agreements in Adrian, Monroe, Port Clinton, Fremont, and Lima, and a Buick franchise in Fremont. In each case, dealers said the franchises were restored prior to arbitration proceedings that had been scheduled for late last month or early this month.

Other terminated GM franchise agreements in the region either remain in the arbitration procedure or the dealerships have abandoned their appeals. GM announced as part of its bankruptcy last summer that it planned to trim 2,300 franchises from its dealer ranks.

A spokesman for GM said the decision to close so many dealers occurred as the company was in bankruptcy, and now business conditions have improved and the company thinks that restoring some of those dealers gives GM more of a competitive advantage.

Within metro Toledo, the Ed Schmidt Auto Group lost its Chevrolet franchise in November and closed its facilities in Maumee in February. Dunn Chevrolet-Buick in Oregon is arbitrating the loss of its Buick franchise this week, and could receive word from its arbitrator this month on whether it will retain the right to sell new Buicks.

"There were really different versions on why they wanted to cancel out dealers," explained Buck Baumann, of Baumann Auto Mall, who had his Cadillac franchise restored in Port Clinton and his Buick franchise restored in Fremont prior to arbitration.

"When it came to Cadillac and Buick, those cancellations were primarily about marketing efforts, irrelevant of dealer performance. In the end, they caved in and gave almost all the Cadillacs back and almost all the Buicks back across the country," Mr. Baumann said.

"Buick was really important to me. It was good to get the Cadillac back, but it was great news to retain the Buick."

Roger McClain, general manager of Lima Auto Mall in Lima, said he was enthusiastic about being able to sell new Cadillacs again this year, in what will be the dealership's 100th year of selling the luxury vehicles in Lima. He said GM required the dealership to alter its facade and "change the showroom a little bit," changes Mr. McClain estimates will cost the dealership about $500,000.

Steve Steinle of Steinle Pontiac Cadillac GMC in Fremont said that his Cadillac franchise had been restored and that "we're just now starting to get [Cadillac] inventory in."

He said GM hadn't asked for any changes to his dealership.

Boomer Chapman of Frank Beck Chevrolet-Cadillac Co. in Hillsdale, Mich., said the dealership is considering whether it wants to go through the expense of getting its Cadillac franchise back.

"At this point, we haven't decided yet whether we're going to send our letter in and go through the process or whether they want to go through the process," Mr. Chapman said.

Mr. Baumann said he believes GM never had a change of heart about its decision to cancel thousands of dealer franchise agreements last year; they just had a change of priorities.

"I think legally, the battles were too uphill, too costly. I don't think they had the time, money, and energy to take it on," he said.

Contact Larry P. Vellequette at:

lvellequette@theblade.com

or 419-724-6091.



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