On Sunday, the Bill Heard dealer group filed for bankruptcy protection. Despite burying the deal on the Lord’s day of rest, the story received considerable play. While TTAC’s long maintained that the U.S. car industry’s domestic dealers are dropping like flies– thanks to the switch out of SUVs and pickups, the end of easy credit and sweet leasing deals, lackluster domestic automotive products, the failure of Big 2.8 branding and marketing, the success of the Asian manufacturers and the rise in floorplan costs– Bill Heard’s demise had a little something to do with the fact that his stores were staffed rapacious sons of bitches who would do ANYTHING to move the metal. There’s a long history of anti-Heard litigation, including an unresolvd $50m lawsuit. Yet the majority of the mainstream media coverage miss this salient detail, including Bloomberg, Automotive News [sub] and our friend Sharon Terlep at Dow Jones. The Atlanta Journal Constitution and The Orlando Sentinel get it right. Oh, and it’s only a matter of time before some class action suit draws GM into the equation, for knowingly shipping cars to a criminal and his cohorts.
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I opened this expecting an answer. No answers ventured?
Sharon Terlep used to be at the Detroit News. On to a new gig?
Perhaps Bill Heard’s Lyin’ Cheatin’ ways are seen as business as usual for domestic stealerships and isn’t newsworthy?
IMHO, Bill Heard was the front man for GM. He was used as pawn for factory operated/backed stores. The franchise laws prevented GM from outright purchase so they let him buy key stategic points. The 4 corners of Atlanta for eaxample. He surrounded the city, making life literal hell for all other Chevrolet dealers. GM turned a blind eye because he moved so much metal. I think GM underestimted the depth of his organization’s ablility to be corrupt.This could be a reach on my part, but that’s they way I always thought about the Heard chain. Sheer greed from the manufactor and dealer, and lots of it. It’s a stretch I know but that’s my spin.
What happens to the inventory? Who ‘owns’ it? I assume the source of the money, e.g. GMAC, ‘owns’ the inventory. Since this is apparently a bankruptcy situation, is vehicle disposal any different here from when a dealer simply shuts down?
I will not be surprised in the least to see dealers around me go down any day. I noticed yesterday the Chevy dealer had 6 or so Malibus. The Toyota dealer has 6 or so Yaris and lots of Corollas. Even 2 Prius. And the Ford dealer has several Focus where in prior weeks there’d be 1 or maybe 2 max. It looks like things have just stopped.
Just the quote “car dealers make the most profit by selling to people who have the least money” made that AJC article worth reading.
Can’t speak for the “national” news-gathering agencies. But for the local papers… at a time when newspapers are dying they are still filled with page after page of ads from car dealerships.
My guess is that the paper is hesitant to take on one of the few sources of revenue they have left.
Bill Heard dealerships are legendary for hard-sale tactics. It is amazing that anyone would test drive at a place so well-known for got giving back your car keys (“sorry, they are locked in the manager’s office–now let’s work up a quote”).
We all had hoped that financial problems would help dislodge the least effective portions of the automotive industry. I see this news in that light.
To answer RF’s question: Why isn’t the fraudulent dealings of the Heard organization listed in the mainstream media’s coverage of the group’s closure?
Easy.
Because right now, it’s the Economy, Stupid (to borrow from Bill Clinton).
The Bill Heard closure story must fit the ongoing plot: Soft Economy (check), Wall Street Crisis (check), Unpopular SUVs and Trucks (check), Tight Credit (check), No Leasing (check).
All the economy boxes are covered, therefore, the story gets editorial blessing and moves right to the front of the Business section.
Fear, loathing, and terror in our economy! See, it took down Chevy’s BEST dealer!
But truth be told, the Heard group’s worst enemy wasn’t the economy, it was themselves.
They’d easily weather this economic shitstorm were they not in the bad graces of every Attorney General in every state where they conduct business, facing millions in penalties and in civil fraud suits. So bad were they that GMAC would no longer lend them money on the Chevrolet vehicles they bought from GM. So even the master which fed the beast knew they had to sever ties.
So you can see the factual headline: “Fradulent Dealer Closes Due to Criminal Business Practices” does not fit the current Economy, Stupid plot. So details of the dealership’s sins are conveniently left out.
So bad were they that GMAC would no longer lend them money on the Chevrolet vehicles they bought from GM.
Unless somebody here knows, I doubt we’ll find out, but why did GMAC cut them off? Ethical considerations? Not likely given the years of cooperation. More likely is that Heard was falling behind in his payments.
And then there’s this little factoid: “In 2005, General Motors Corp. awarded Heard the automaker’s highest honor: Dealer of the Year.”
I wonder whether more than one dealer gets this award per year. No doubt GM well knew this guy’s methods, so did they give no consideration to it, or went ahead with the award anyway?
Mr. Bronkowitz hit it on the head. The newspapers are loathe to go after such a huge source of ad dollars.
A little OT, but Jalopnik has an interesting read on this.
http://jalopnik.com/5056225/exclusive-inside-the-fall-of-bill-heard-chevrolet-the-worlds-largest-chevy-dealership
I guess no GM insiders read this site.
This was a prominent story in the Tampa Tribune.
As someone who was swindled by these crooks on an 05 Trailblazer at the Buford (Mall of Georgia) store, I must admit a perverse glee.
I’m still paying for the mistake of doing business with these guys.
The story in the Sunday AJC (although the smallest there) was on the front page.