(1992-1995) GM STRONG-ARMS SIGNER TO NEWARK;
SIGNER BUILDS FACILITY THERE UNDER PRESSURE,
FORFEITS FREMONT AUTO MALL INVESTMENT
- (1993) GM issues Project 2000 Plan for Signer to relocate to Newark; GM threatens to end Signer’s Cadillac franchise; strong-arms Signer into Newark agreement: In 1992, GM began its formal request that I relocate to Newark instead of the Fremont Auto Mall. On January 28, 1993, Cadillac sent me a letter stating that if I did not relocate on a specified timetable, it would be considered terms for non-renewal of my Cadillac Dealer Agreement, which would put me out of business. In February 1993, GM presented its long-anticipated Project 2000 Plan to its dealers, which formalized its retail brand channeling and revealed its experts’ determination of where each dealer is to be located. The brand channeling involved how GM brands would be housed in dealerships, with a primary focus being the Buick-Pontiac-GMC (B-P-G) channel, in which those three brands would be housed together, as well as Oldsmobile being housed with either Chevrolet. Cadillac, or both. Project 2000 provided each dealer with a notice of where GM’s ”experts” determination of where the dealer should be located, which in my case was “near NewPark Mall” (in Newark). On March 10, five GM representatives met with me and, with a nasty tone and belittling approach, placed merciless pressure on me to agree to its Newark plan. The representatives reminded me of the threat to end my Cadillac franchise. GM offered its Motors Holding Division (MHD)[3] financing for Newark, but not the FAM. As part of GM’s Newark plan, I had to agree to give GM 25 years of “site control”, which meant that I could not sell anything other than GM products in the facility for the period.
- (1993) Signer agrees to Newark under GM pressure; GM causes Signer to miss out on free land at FAM; Fremont mayor writes scathing letter to GM President: Realizing that GM’s threats left me no viable choice but to succumb to its pressure to relocate to Newark against my will, I attempted to negotiate the best deal I could. I also had to accept GM’s plan of a new MHD-formed corporation, also against my will. I had sought real estate financing, not a business partner. Among other things, the formation of the new corporation caused me to forfeit significant LIFO (Last In First Out inventory accounting) and other tax benefits contained in my original corporation. It should be noted that in late March 1993, Catellus offered me the possibility of free land in the FAM by way of enhanced Fremont tax incentives. I discussed this with Newark project mastermind GM Argonaut representative Roch McClain, who responded that GM wouldn’t be interested even if free, thus depriving me of the opportunity. On July 14, 1993, GM held yet another 5-man meeting to firm up my agreement to its Newark plan. On August 20, an article appeared in the Fremont Argus announcing my agreement to relocate to Newark. After reading the article, Fremont Mayor Bill Ball sent a scathing 6-page letter to GM President Jack Smith about the way GM had mistreated the City of Fremont in regard to the Fremont Auto Mall. On page 5, the letter states that GM representative Raymond Buttacavoli finally revealed that “GM people” had advised Motors Holding and GMAC not to finance any moves to the FAM. On page 3 of the letter, it is stated that GM’s Roch McClain displayed disinterest in the FAM in 1989. A December 5, 1988 letter from Pontiac Zone Manager Bob Durand to Pontiac-GMC dealer Rich DiGiulio illogically discouraged his relocation from his poorly located 25-year-old building to the Auto Mall, and notified him of Pontiac’s plan to establish new representation in Milpitas. In driving distance, the was about 8.8 miles from the Auto Mall site, and about 10.1 miles from the Newark site. Driving distances for DiGiulio’s existing facility, and proposed Auto Mall and Newark location are shown. (The address of Billings Chevrolet in Milpitas is used. Second generation dealer Mike Billings relocated from San Jose to GM’s selected location in Milpitas in 1992, and then closed in January 2005. It never reopened and Pontiac never pursued Milpitas.) California’s 10-mile radius franchise law (based on straight line) would enable Mr. DiGiulio to protest a new Milpitas point if he were in the Auto Mall, but possibly not if in Newark. It thus appears that GM’s decision to refuse Fremont Auto Mall financing was selfishly and secretly made at that time in 1988. As Mr. McClain seemed to have full authority, even over the local Buick and Cadillac Zone Managers who knew the market and me well, to determine the fate of my relocation, all my years and money invested in the Fremont Auto Mall project never had a chance of bearing fruit for me.
- (1994-1995) Gee and Signer relocate to Newark: In May 1994, Bob Gee relocated Fremont Pontiac-Olds-GMC (P-O-G) to a new facility he constructed in Newark, at which time GM’s MHD bought out Dee Barnes’ ownership share. I began construction of my Newark facility in fall 1994, and then relocated there in July 1995.
