(2009-2010) GM FILES BANKRUPTCY, TERMINATES
SIGNER THEN OFFERS SHAM “OPPORTUNITY”;
DOSANJH GETS SIGNER FRANCHISES
Shortly after the judge’s tentative ruling to dismiss my lawsuit against GM, on June 1, 2009, GM filed bankruptcy and notified approximately 1350 dealers of their elimination. As one of those dealers, GM presented me with a “Wind Down” Agreement. Dealers were offered a small amount of money to sign the agreement, which included a clause to not sue, and were required to FedEx the agreements back and arrive in Detroit by June 12. A dealer not signing the agreement would lose his or her franchise(s) at the time the bankruptcy court ruled, which was anticipated to be within about a month, and would receive no money. A dealer who signed the Agreement could remain in business up till a maximum of October 31, 2010, receive a token payment, but must waive all rights to existing or future legal action. I considered my options, which included not signing the agreement and then appealing the judge’s ruling. Considering the additional stress and expense I would incur, as well as the fact that GM’s bankruptcy left it few assets to pay a judgment, I made the only sensible choice and signed the Agreement.
I returned the Wind Down Agreement to GM on June 11. On June 12 at 8:32 AM Pacific time (11:32 AM Eastern time), a Detroit GM employee signed a FedEx receipt for the package. At approximately 11:00 AM, in eerie “coincidence” less than three hours after GM’s receipt of that agreement, Fremont Chevrolet’s Rick Corso, Jr., appeared in my showroom unannounced. He came into my office and asked me if I wanted to sell my special tools. Special tools are designed for specific GM vehicle brands, in my case Buick and Cadillac, and required for dealers with the franchise(s). The timing of Mr. Corso’s visit leaves no doubt that, through Mr. Dosanjh, he was aware that my Wind Down Agreement had just arrived in Detroit. As Mr. Dosanjh’s employees had been telling the public for a year that his dealership would “take over” mine, it was now confirmed that Mr. Dosanjh would receive my franchises, and thus was a co-conspirator in GM’s engineering of my demise.
Almost immediately after GM’s June 1, 2009 dealer closure announcement, which was preceded by Chrysler’s April 30 bankruptcy and dealer closure announcement, there was angered backlash from several fronts beyond the terminated dealers themselves. Among those opposing the closures were many members of Congress and Attorneys General representing 37 states, including California. After much discussion in Congress (and opposition by General Motors) a law was passed that allows terminated dealers to apply for reinstatement through arbitration. In early 2010, many GM dealers applied for reinstatement, which was followed by GM reinstating hundreds of them, both pre- and post-arbitration. As the volumes of my Buick and Cadillac brands alone were totally insufficient to support a dealership in today’s market, and GM had repeatedly denied me its GMC franchise that GM itself says is necessary for a dealership to be viable, there was no point in my pursuing arbitration.
Shortly after Mr. Dosanjh acquired Saturn of Fremont (in Newark) in April 2008, I began receiving reports that the dealership’s employees were informing customers that they would be “taking over” my Cadillac franchise, as noted in the section “Inder Dosanjh Instant Empire.” Then, after the failure of Mr. Okenquist’s Fremont Pontiac-GMC, in keeping with the development of Mr. Dosanjh’s instant East Bay empire, it became clear that Mr. Dosanjh was the intended recipients of both of my franchises, as well as Pontiac-GMC (before Pontiac’s demise.) Even though my franchises technically remained in effect with me until October 31, 2010, Mr. Dosanjh and his employees continued to inform outsiders that Mr. Dosanjh would receive my franchises. Among the credible reports I received were the following:
- December 2009: Fremont City Council Member Anu Natarajan informed me that Mr. Dosanjh told her he would be receiving the franchises GM took from me.
- April 2010: Fremont Ford (in Newark) dealer Steve Hallock told me that Fremont Chevrolet Sales Manager Pat Davis informed him that his company would soon begin operation of Buick-GMC-Cadillac in GM’s empty Saturn/Chevrolet facility in Newark pending relocation to a new facility to be constructed at the Fremont Auto Mall. (Pat Davis is the son-in-law of Ken Okenquist, and managed Fremont Pontiac-GMC in Newark until it closed in January 2009.)
- April 2010: Winn Volkswagen (in Newark) dealer John Nguyen told me that Rick Corso, Jr., had made statements to him that were similar to the ones Mr. Davis had made to Mr. Hallock.
- May – August 2010: Multiple other individuals informed me of hearing the same story from various sources.
On July 19, 2010, the Treasury Department released the SIGTARP Dealer Network Reduction report, which resulted from an audit of the use of TARP funds. The report was scathing in its findings of improper GM selection methods of dealers for termination. It is noteworthy that the name of the report is “Factors Affecting the Decisions of General Motors and Chrysler to Reduce their Dealership Networks.” As the title implies, General Motors and Chrysler informed the Treasury’s Auto Team (Presidential Task Force on the Auto Industry) that dealership reduction was necessary for its recovery in its restructuring, and the Auto Team apparently believed them. What the manufacturers concealed from theAuto Team is that they planned to simply steal many of the dealerships in order to turn them over to favored dealers. The report chastises GM for the arbitrary nature of its selection of targeted dealers, often bearing no relation to dealer performance, quality of facility, customer satisfaction, etc.
Immediately after the report was released, Tamara Darvish of the Committee to Restore Dealer Rights Co-Founder wrote an e-mail requesting that the House Oversight Committee investigate the findings of the report. I followed that on July 23, 2010, with an e-mail to the House Oversight Committee describing GM’s theft of my franchises for the GM/Dosanjh takeover of GM East Bay Market. On July 29, GM sent me, as well as nine other local dealers, a request for proposal for me to get my franchises back.
After this latest bizarre development, I called the contact person shown in the request for proposal, Herman Caruthers, who had been part (although not aggressive) of the GM exit inducement team since late 2004. I expressed my shock and amusement at this latest GM stunt, and asked some questions:
- As I had heard of one other dealer who had received a similar request for proposal for my franchises, I asked how many GM had sent. Mr. Caruthers responded that there had been nine others sent in addition to mine. He added that GM had sent them out because Fritz Henderson (GM CEO beginning in April 2009) committed to Congress that GM would offer terminated dealers new opportunities when they would come along. Mr. Fritz’s “commitment” was made in conjunction for GM’s request for bailout money.
- I asked Mr. Caruthers why GM would send the requests for proposal out when it had committed my franchises to Inder Dosanjh in 2008, and GMC apparently in early 2009 after Fremont Pontiac-GMC closed in January. He denied that GM had committed the franchises to Mr. Dosanjh.
- I asked if GM would accept selling Buicks and Cadillacs out of my Buick-Cadillac design facility that GM required I build, rather than out of the facility of the failed Saturn brand. Mr. Caruthers said I could propose that.
- As the request for proposal stated that the dealer would rent the Newark Saturn facility temporarily, and then be required to build a new facility at the Fremont Auto Mall, I asked the cost of each. He said he didn’t know, and referred me to GM real estate representative Fred Zehnder. I called Mr. Zehnder, who said he didn’t know the cost of either. After several minutes of discussion, Mr. Zehnder finally suggested some general ranges – around $25,000 per month rent for the Saturn facility, and around $25 per square foot for the Fremont Auto Mall property.
As neither Mr. Caruthers nor Mr. Zehnder were prepared to give specific amounts for Saturn facility rent or Fremont Auto Mall purchase, it is clear that GM had no intention of awarding the franchises to anybody other than Mr. Dosanjh. Considering all factors, and the eerily “coincidental” timing of the requests for proposal being sent just six days after I sent the July 23 e-mail to members of the Congressional Oversight Committee, it is quite apparent that one or more of the Congressional recipients forwarded my e-mail to GM with some kind of request for response. It thus seems that GM’s response was to “honor its commitment” to offer terminated dealers new opportunities, and coached Mr. Caruthers to make the statement about Fritz Henderson’s commitment to Congress. It is noteworthy that terminated San Jose Chevrolet dealer Tim Carl was one of the dealers receiving a request for proposal for my franchises, but I never received one for his franchise before GM awarded it to another dealer.
On August 20, per instructions in GM’s Request for Proposal, I sent an e-mail with my proposal to operate the Buick-Cadillac-GMC dealership in my Buick-Cadillac facility GM demanded I build in Newark. I included copies of the e-mail to GM President Mark Reuss and new GM CEO/Chairman Dan Akerson. On August 26 I received an e-mailed letter from GM’s California attorney stating, in part, “Finally, although GM has complied with its commitment to Congress to offer all local wind-down dealers the opportunity to submit proposals where a brand previously wound down is proposed to be re-established in a particular locale, GM’s transmission of a request for proposal package to you under cover of a letter from Dale Sullivan, Regional Business Operations Manager, is not an invitation to you to resume contacts with GM management.” This statement reinforces my observation that the Request for Proposal was a sham to give the illusion of compliance. The statement also repeats the message the attorney sent me in March instructing me not to communicate with GM management (after my twenty-nine years as a GM dealer.) As I expected, on September 30, 2010, I received a GM denial response, stating that GM had “decided to pursue another candidate with respect to this opportunity” [that had been stolen from me.] In October 2010, the Treasury Department unit initiated an investigation of possible illegal GM dealer termination activities.
On November 15, 2010, an hour after the Signer Buick-Cadillac GM sign was hauled away, the cover came off a “Cadillac” sign that had been installed on the former Saturn facility two doors down. This marked the official opening of Fremont Cadillac-GMC-Buick as a result of GM’s awarding my franchises plus GMC that it had repeatedly denied me to Inder Dosanjh. For the story behind Mr. Dosanjh’s mysterious meteoric rise, see Expanded Details, “Inder Dosanjh Instant Empire.”
