1997-1998 GM STEALS PONTIAC-OLDS-GMC FROM
NEWARK DEALER, PLOTS SIGNER EXIT; SIGNER
REQUESTS PONTIAC-OLDS-GMC, GM REJECTS
After eight months of multiple attempts, by mid-1996 it appeared that GM finally accepted the fact that I would not consider trading my Buick franchise for the doomed Oldsmobile franchise. Not to be deterred from achieving its goal of channeling and acquisition, GM began a “Plan B” to take control of both Bob Gee’s and my dealerships using an intricate symphony of conspired acts. These acts began in 1997 with a series of acts of harassment culminating in the removal of Mr. Gee, and then continued into 1998 with various acts against me. I am certain that any reasonable person would conclude that the acts, when viewed collectively, were all elements of a conspiracy involving a multitude of GM Network Development, MHD, GMAC, Pontiac Motor Division, and Buick Motor Division employees intended to remove Mr. Gee, and then harass me into selling out. I am aware that periodic meetings were held between the aforementioned GM divisions (plus Chevrolet, GMC, and Oldsmobile) in which channeling and dealer consolidation issues were discussed. I wish to make it clear that I have no proof of GM’s involvement with the union pickets beyond the overwhelming evidence I present herein, but I am totally confident in my observations. Supporting documents may be viewed by clicking on the blue links.
A February 24, 1997, letter from Motors Holding General Director T. T. Hoskins, III, to all MHD dealers, may explain the motivation for the aggressive actions against Mr. Gee and me. The letter states in part:
“You are all familiar with the challenges to our industry. Almost daily new challenges surface. GM’s 2000 Plan and Channel Strategy were developed to help GM meet these challenges by the year 2000. But, the year 2000 is too far away. We need to accelerate our efforts now…
Effective March 1, 1997, thirteen (13) Motors Holding personnel will be reassigned to Dealer Network Development. They will now be responsible for all dealership acquisitions needed for implementation of GM’s 2000 Plan and Channel Strategy. Motors Holding will continue to invest in a significant number of these initiatives.”
As a result of the initiative described in this letter, Branch Manager Ron McCants became “Portfolio Manager.” He was in the Branch/Portfolio Manager position throughout all activities concerning Mr. Gee and me from 1995 to my buyout of Motors Holding in 2000. Consistent with its publicized dealer reduction/consolidation goals, GM took aggressive, life investment-destroying actions against Mr. Gee and me. It seems that GM and MHD considered the elimination of both of us to be an easy channeling project since MHD controlled both dealerships. Plus, it was convenient since we were less than 10 minutes from the GM San Francisco Zone Offices in Fremont. The San Francisco Zone was responsible for Northern California and all, or part, of approximately thirteen other western states.
During 1997, GM publicly announced its desire to accelerate reduction and consolidation of its dealer body. GM’s Project 2000 Plan had been in effect for several years, and the Southern California San Fernando Valley dealer buyback project was under way. Such high priority was assigned to GM’s dealer network overhaul efforts during the 1997 time period that mainstream business publications carryied articles on the subject. As an example, a June 6, 1997, Wall Street Journal article entitled “GM Speeds Its Makeover Of Car-Dealership Network” details GM’s increasingly aggressive efforts.
MHD removal of Bob Gee
As an apparent result of strategies described in the February 24, 1997, Motors Holding letter, it seems that a victim of GM’s stepped-up efforts was Fremont Pontiac-Oldsmobile-GMC Dealer Operator Bob Gee. Mr. Gee’s business practices were consistent from the time he became dealer operator in early 1992 with private capital, through the time he became a Motors Holding dealer in mid-1994, and continuing through the end of 1997. According to Mr. Gee’s written statement, despite these consistent operating practices, many unprecedented disruptive and damaging events occurred at various times throughout 1997, beginning early in the year. These disruptive events included Pontiac’s shipment of 200 unordered Pontiacs, unreasonably delayed Pontiac warranty claim payments, weekly GMAC flooring audits, and intimidating GMAC deal jacket inspections. GMAC never told Mr. Gee that it found anything wrong in the inspections.
After enduring the conspired events in 1997, on November 21, 1997, Mr. Gee received a telephone call from MHD Branch Manager Ron McCants, who said, “We want a divorce.” He stated that there would be a Board of Directors meeting at which he would be voted out. In the weeks that followed, Mr. Gee was voted out at the noted Board meeting, during which Motors Holding was served with a cease and desist order that had been filed by Mr. Gee. Mr. Gee continued to work daily through December 1997 while a settlement was negotiated with an ultimate agreement date of January 1, 1998. Mr. Gee was obviously devastated at the loss of the dealership and real estate investment into which he had put his heart and soul.
Mr. Gee stated that his removal was totally unexpected, and that he had received absolutely no prior consultations of any kind from MHD warning him of this possibility. When viewing the entire series of events in 1997, it appears that employees of Pontiac, MHD, and GMAC conspired in the adverse acts described above in order to financially and psychologically weaken him. When the time came to inform him of his removal in November, Mr. Gee’s artificially weakened position would result in diminished ability and will to fight MHD’s actions. Assuming that my observations are correct, MHD’s actions with, and ultimate removal of, Mr. Gee were absolutely unconscionable for many reasons, some of which follow.
In partnership with Dee Barnes, Mr. Gee had bought the Pontiac-GMC and Oldsmobile dealerships with private capital in 1992, then entrusted his investment to MHD when MHD bought Mr. Barnes’ ownership share concurrent with Mr. Gee’s relocation to the new Newark facility in 1994. He had spent considerable time designing and constructing the new facility under the trusted MHD agreement that he would own the facility and the accompanying real estate financial benefits upon his ultimate buyout of MHD. In the end, MHD’s exploitation of Mr. Gee’s trust cost Mr. Gee the business and facility he had worked so hard for.
Multiple local GM dealers stated to me that after Mr. Gee’s forcible removal, they had the impression (but no specific knowledge) that there had been wrongdoing by Mr. Gee that caused his removal. While it is unknown if GM, MHD, or GMAC was responsible for spreading false rumors to that effect, it would seem that if there had indeed been wrongdoing involving Mr. Gee, GM would have accepted one of my multiple offers to buy Fremont Pontiac-Oldsmobile-GMC in 1998 rather than attempt to buy me out immediately following GM’s removal of Mr. Gee.
GM inducements for Signer exit
As GM’s aggressive efforts relate to Signer Buick-Cadillac, a series of unprecedented and suspiciously timed events occurred between November 1997 and September 1998. When connecting the dots between these events,[1] they all appear to be related to GM’s plan to harass me into selling out. These events are listed on the GM Inducements to Sell 1997-1998 Timeline (Excel file) (PDF file). In the following I will explain what I see as the correlation of these events to GM’s goal of harassing me into submission to its plan.
On November 15, 22, and 28, 1997, for about three hours each day, a small percentage of our union employees picketed in front of our dealership. As shown on the GM Inducements 1997-1998 Timeline, all of these dates were within a week before and a week after Ron McCants’ November 21, 1997, “we want a divorce” call to Bob Gee. These were two Saturdays and the day after Thanksgiving, so no work was missed, and no further Signer employee weekend pickets ever occurred. This was the first time the dealership had ever been picketed, despite the fact that the dealership’s employees had been represented by the union since the dealership’s opening in 1980, at which time when almost all Bay Area domestic brand dealerships were union. The concurrent timing of the pickets and the “we want a divorce” call strongly suggests that it was no coincidence. In piecing the picketing with the “divorce” call timing and the events that were to follow, it seems that the union used its skills as a motivator of union loyalists to rally the small group of my employees to turn against me after a long and peaceful relationship.
On December 16, 1997, Buick Zone Manager Susan Koerber (later changed to married name Keenehan) sent me a memorandum chastising me for turning down most of the November and December LeSabre allocation. This was written in spite of the fact that the excessive allocation would have resulted in a nine-month supply of LeSabres for the dealership, and that all dealers regularly declined excess allocation without reprisal. This was the first and last letter of this nature I had or have since ever received, and I am not aware of any other dealer receiving such a letter. On January 2, 1998, I sent a response letterto Ms. Koerber citing the absurdity of the logic in her memorandum. She sent an acknowledgment letter stating that it was “important to go on record” with Buick’s analysis. It is interesting to note that the December 16 letter showed copies to our Buick District Sales and Service Managers, and one to “Dealer File,” in an apparent attempt to instill fear of “building a file.”
On January 2, 1998, in eerie “coincidence” the day after Bob Gee’s departure, four picketers appeared in front of my dealership carrying “rat” signs and using noise-making devices. They were not our employees, but were people hired by the union. As time went on, these four people would continue to picket eight hours a day, seven days a week, until the end of August. These picketers continually harassed salespeople and customers with noisemakers and the shouting of slanderous comments about the dealership. Our union employees continued to work normal hours without interruption throughout the months the picketers worked. During the months of picketers, the union publicized its actions in its newsletters in early 1998 and in April-May 1998. The constant theme of the picketers was the demand that I replace our company 401k-retirement plan with the union’s pension plan for our union employees. Throughout the first eight months of 1998, I met with the union multiple times in negotiations, at which the union continued with its focus on the 401k/pension issue.
It is interesting that in 1994 Signer employees agreed to exchange the union pension plan for the company 401k, and the union health insurance for the company health insurance plan. The savings realized by the dealership from changing to the more cost effective company plans were given to the employees in the form of a pay raise. Each employee was then able to decide individually how much he or she would like to contribute to the company-matched 401k. The union reopened the subject during contract negotiations in 1995, and requested a secret ballot to be held on September 12, 1995. On that date, our union employees voted 13 to 4 in favor of continuing with our company 401k over the union pension option; a solid rejection of the union’s plan. The contract was subsequently provided by the union and signed, with an expiration date of March 31, 1996. Following the expiration, contract negotiations began anew.
On approximately January 15, 1998, MHD brought in Steve Jackson as Dealer Operator of Fremont Pontiac-Oldsmobile-GMC. Mr. Jackson, a member of the GM Minority Development Program, took over management of the dealership. Mr. Jackson told me in 2006 that, as part of MHD Portfolio Manager Ron McCants’ first day orientation with Mr. Jackson, Mr. McCants told him, “You have union issues,” and that the union had cards that had been signed by the employees. The dealership did not have union representation during Bob Gee’s ownership with MHD, and Mr. Gee states that there was no hint of any such activity prior to his departure just two weeks earlier. So, it can be assumed that these union cards were signed when MHD operated the dealership during the brief two weeks between Mr. Gee’s departure and Mr. Jackson’s arrival; an odds defying scenario without special influence. It would seem that the Fremont Pontiac employees would be an easy sell for the union, as the union could instill fear of the unknown into the employees due to GM’s ruthless takeover, and absence of a dealer operator. The union could also point to the pickets that began at my dealership on January 2 as support it offers its members.
Shortly after the picketing began, on February 5, 1998, GM Network Development Area Manager Dave Bott met with me and asked me to sell my franchises back to GM, while picketers simultaneously continued to make noise out front. Mr. Bott opened the February 5 meeting with a statement that Bob Gee’s departure was just a coincidence with GM’s San Fernando Valley project, described in this December 1, 1997 article. This concurrent initiative involved GM’s desire to buy back all dealerships in that portion of the Southern California retail market. On March 26, 1998, the union staged a noisy two-hour after-work “rally” consisting of apparently 25 union technicians of selected surrounding dealers, which was publicized in the March 28 Fremont Argus. Only three Signer employees participated in the one-time event. It is highly probable that the union had informed the Argus in advance about the upcoming rally, especially since it occurred after normal business hours. Shortly after the rally, on April 7, 1998, Mr. Bott called me again to ask if I wished to sell, while during the conversation the picketers continued to noisily walk the sidewalk in front of my dealership. Each time Mr. Bott approached me about selling, I expressed interest in acquiring Fremont P-O-G that GM now owned, and to then trade Buick with Olds. GM declined my proposals.
The union-hired outside picketers continued daily, making noise, harassing employees and customers, and distributing flyers containing false information. To counteract the misleading flyers, I wrote a statement of explanation about the picket for distribution to customers. It should be noted that no Signer employee ever participated in any of the daytime picketing, or ever missed any work.
As the picketers continued their harassment, I received a strange and unprecedented letter dated June 5, 1998, from Assistant General Sales Manager – Field Ken Wechselberger. Mr. Wechselberger was responsible for the field operations of the entire country, which included approximately 2800 Buick dealers. Curiously, his letter was written on letterhead from Southwest Region in Irving, Texas. My dealership was under the Western Region in Thousand Oaks, California. The letter cited a trivial 15% one-month sales-to-objective shortfall, and a year-to-date decrease in my Buick sales. In the letter, Mr. Wechselberger acknowledges the picketers, stating, “I understand that you have had some picketers that have had a negative impact on sales…” This statement itself explains the probable cause of our small decrease, and thus makes the only impact of the letter to be rubbing salt in the wound. The letter included copies to the Western Regional Manager and Zone Manager Susan Koerber.
For a variety of reasons, it seemed very odd that Mr. Wechselberger, would write an unprecedented letter of this nature. Some of the unusual elements of this letter follow:
- There had been no prior verbal or written mention by any lower level Buick representative concerning our missing of the May objective or of the year-over-year sales decline. In fact, I don’t recall Buick ever previously discussing or sending a special letter regarding a perceived sales deficiency.
- Mr. Wechselberger was responsible for approximately 2800 Buick dealers nationally, and took time out of his day to bypass middle management levels and write a trivial letter that could and should have been addressed at the local level, if at all. The chain of command at the time, starting at the bottom, was District Manager Chris Huddleston, Zone Manager Susan Koerber, Western Regional Manager Lyle Pennington, then Mr. Wechselberger.
- The letter was written to a dealer whose sales had been depressed by outside picketers, thus “kicking him while he’s down.”
- The letter’s statement that we had missed our (GM arbitrarily assigned) May Buick objective by 3 cars or 15%, ignores that fact that, based on GM sales reports we began receiving in the last few years, probably at least a third of GM dealers achieve less than 85% of their objectives.
- It seems strange that he would even know that we had the picketers.
I can only conclude that this attempted “file-building” letter was yet another tool in GM’s harassment plan. It should be noted that if most of all of the shortfall of 31 Buicks sold in five months of 1998 versus 1997 could be attributed to the union activity, then a proportional deficit could be applied to new Cadillac and used vehicle sales, as well as parts and service sales. Extending those five months of Buick sales to the eight months the pickets operated translates into large damage to the dealership, most likely in the range of $100,000 – $200,000 net profit.
The noisy picketers continued through the time when on August 7, 1998, my union employees filed a petition for a union decertification vote, which the NLRB scheduled for a later date. Unbelievably, the four union-hired picketers continued their picketing in front of my dealership despite the strong message from my employees that they may no longer want the union. About that same time, Steve Jackson informed Motors Holding that he no longer wished to stay at Fremont Pontiac-Olds-GMC in Newark, and requested that he be given a dealer operator opportunity in Folsom, California. Motors Holding and GM granted his request.
When Mr. Jackson left the dealership in early August, Motors Holding promoted Sales Manager Eleanor Felbaum to General Manager of Fremont Pontiac-Olds-GMC. Like Mr. Jackson, Ms. Felbaum was a member of the GM Minority Development Program.[2] She had been placed at Fremont Pontiac-Olds-GMC in January 1998 as Sales Manager.
Upon later hearing of the chaos at the Newark dealership resulting from the exodus of Mr. Jackson, I asked Mr. Bott if GM was ready to sell the dealership to me. He responded that he would support my request, and to send him a letter for him to forward to Detroit. On August 27, 1998, I faxed the requested letter dated August 26. At about that same time, the union scheduled an employee vote on my contract proposal for August 31, 1998. Following the employees’ overwhelming vote in favor of my proposal, the picketers ended the next day, September 1, and the union representative called me to tell me he would get the contract written so it could be signed. After the picketing ended, I estimated the cost to the union for the picketers for the 8 month to be $61,440.
In early September, one of my employees presented me with a stack of papers with signatures representing 71% of my union employees. He informed me that he had delivered the originals to the NLRB. In an obvious statement of disapproval of their own union’s actions, the employees’ signatures confirmed their desires to no longer be represented by the union, with the high percentage of signatures eliminating the need for the pending NLRB decertification vote. Based on this evidence, on September 9, 1998, I notified the union that we were withdrawing recognition of the union as the representative of our employees. The page following the letter to the union is a sample of a petition signature. Six days later, on September 15, 1998, after an eight-month union campaign and by a unanimous vote of 18 – 0, the employees of GM-owned Fremont Pontiac-Olds-GMC voted the union in[3] as its representative. Fremont Pontiac-GMC remained a union dealership until it closed in financial failure in January 2009, and my dealership remained non-union until GM filed bankruptcy and confiscated my franchises in 2009.
In summary, the 1998 series of events described above strongly suggests a bizarre agreement between General Motors and the union in which GM would allow the union to easily be voted into its Pontiac-Olds-GMC dealership if the union would harass me as an aid to GM’s efforts to effect my exit. The apparent secret agreement between GM and the union would most likely have been made prior to the November 1997 removal of Mr. Gee and the concurrent weekend picketing by the handful of my employees. It seems that GM’s plan was for Steve Jackson to take over my dealership in addition to Fremont Pontiac-Olds-GMC, and in the process make the Buick-Olds trade for proper alignment. When Mr. Jackson asked to be relocated to Folsom, GM’s plan was derailed and Dave Bott told me he would support my plan to acquire Fremont Pontiac-Olds-GMC. Consequently, the picketers were no longer needed.
When determining the accuracy of my observation that GM instigated the picketers, one must consider the huge odds against all of the above virtually unique events happening to a dealer openly targeted such as myself, unless they were part of another agenda. In addition to the suspicious combination of Buick management “fear” letters to me and apparent coordination with Mr. Gee’s removal, the question is raised of why the union would spend an estimated $61,440 for outside picketers for my small dealership that was already a union shop, and use a message of switching to the union pension plan which was already voted down by Signer employees 13 to 4. Then, after Signer employees filed the decertification petition on August 7, 1998, indicating possible rejection of the union, astoundingly the picketers still continued. In my opinion, there is no other conclusion that can be reached other than that GM instigated the union picketing.
GM rejects Signer’s request for Pontiac-Olds-GMC despite Dave Bott’s recommendation
On September 21, 1998, Mr. Bott sent a correspondence to his Detroit-based manager, forwarding my August 26 letter and supporting the merits of my Fremont Pontiac-Olds-GMC acquisition proposal, as well as reporting of a proposal that had been submitted by another dealer. In October, Mr. Bott responded to my August 26 letter, stating that Detroit had declined my request to acquire Fremont P-O-G without stating a reason. This Detroit overriding of local GM executives who know the market and the dealers best was reminiscent of Roch McClain’s apparent overriding of the San Francisco Buick and Cadillac Zone Managers who supported the Fremont Auto Mall. (In a 2009 deposition, former MHD Branch/Portfolio Manager Ron McCants stated that Detroit said that I did not have a track record of a high volume franchise. When questioned if he was aware of my high 1980’s volume when Buick was a viable franchise, he responded that he was not.)
In December 1998, Mr. Bott presented me the profile of an undisclosed troubled GM dealership he proposed to trade for mine. In December 1999, Mr. Bott’s replacement, Dan Meyer, approached me with yet another Buick/Olds Newark trade proposal. In December 2000, after an engineered sales collapse, GM announced the long-anticipated closure of Oldsmobile Division.
[1] I did not realize the apparent coordination of GM and union events until 2006 when I assembled documents from several files in chronological order. The picture that emerged, combined with the knowledge I gained of GM’s apparent inducement methods in the 2005-2006 warranty audit, IRS audit, and GMAC harassment, made the 1997-1998 GM/Union plan clear to me.
[2] Ms. Felbaum is Asian; Felbaum is her married name.
[3] Eloquent memo was written by Signer Shop Steward Ken Davison (mentioned in March 26, 1998 Fremont Argus article), a longtime union loyalist. He subsequently resigned and became employed by Fremont Pontiac-GMC after it became a union shop.
