Holy lack of internal controls Batman! Automotive News [sub] reports the “now it can be told” story behind the story of a Minnesota mega-dealer’s collapse. Chrysler pulled the plug on Denny Hecker last fall, forcing Hecker to close six of his 16 dealerships and sell three others. Turns out Chrysler Financial lent the “flamboyant 56-year-old entrepreneur” $550 million. And get this: $50m of that went to Hecker personally. The information surfaced after Hecker sued Chrysler Financial for canceling his dealerships’ credit lines “without warning.” Chrysler countersued, revealing that it loved them some Hecker. Post-Cerberus, ChryCo threw money at—I mean, “invested”—in Hecker’s dealerships, a rental car agency (since bankrupt), real estate and “investment firms.” Ford was behind the curve on this one; they’ve sued Hecker for a relatively paltry $3.1m for missing vehicle and parts payments. As the Detroit-shaped crater grows larger, look for more “revelations” from American automakers’ go-go past. Others may have done the same thing, but they won’t be facing the same volume or genre of music if/when their dealers end up in bankruptcy court. Meanwhile, Denny better hope his tagline doesn’t apply to his forthcoming court battles: “Nobody walks!”
Awww Denny Hecker you crooked SOB. It was terrible when he started closing dealerships because he employed so many people, but this guy was a bottom-feeding, false advertising smear on an already generally mistrusted industry. Chrysler should have expected to get ripped off by this schmuck. I remember seeing some commercial of his where they claimed the Kia Rio got 41 mpg. It played for a couple of weeks, blowing my mind every time as I stammered at the TV about lies and idiocy.
This guy preyed on the poor, luring them to his dealership to sell them cars they could never afford and hustling them into bad bad deals. What a total jerk. I’m glad to see that sometimes dishonesty and avarice actually doesn’t yield wild success here in the good old USA.
One “good” thing about severe economic downturns is that they reveal a whole lot of the chicanery and fraud which had been successfully hidden during the boom. It is no accident or surprise that things like Madoff’s scam and this Hecker disaster are coming to light in these times.
The analogy often used is a lake and water. Drain half of the water and suddenly you can see the big boulders which were previously hidden just below the surface. We are not done seeing shockingly big rocks revealed.
Denny Hecker…the worst auto dealer in Minnesota. Never have known anyone to buy a car from one of his dealerships and say anything positive about the experience. One can hope that his remaining 10 dealerships fold and better management can move in and fill the void.
It’s hard to know who to cheer for in this case. I’d be encouraging Chrysler, if I thought any of the recovered money would be put to good use. Fat chance of that.
How is it that Hecker has stayed in business so long? Everyone I know regarded the entire operation as scum. Who would still buy a car from Hecker?
I suppose the only possible explanation is that few car dealers are measurably better.
$550 million?
That’s almost 20,000 cars worth of inventory. Even at 16 dealerships that’s ridiculous. Was anybody at ChryFi paying attention?
I wonder how Chryslerberus has accounted for the Hecker debt on its books, whether it has been written off as bad debt or is still being counted as loans payable?
Denny Heckler is the only person in the world that could make Bill Heard look angelic.
Hecker is a crook!
My mom bought a Ford Escape from his now closed Stillwater MN Ford dealership. The ‘Ford’ logo on all of the center caps was peeling off and they flat out refused to replace them, and when she picked up the car, it had NO gas in it. They gave her a $10.00 gas card to the local SA.
I purchased the old parts truck from his Monticello dealership a few years ago. The sales experience was pretty typical…nothing out of the ordinary.
The strangest thing about the purchase was that they digitally filmed the signing of the papers. There was a little digital video camera above the sales manager’s desk. They went through a series of questions about the sale price, the fact that there was no warranty, that they weren’t promising to do anything more to the truck after the papers were signed, etc. As I recall, I had to verbally agree to everything on camera. I’d never experienced anything like that before.
I related that story to my buddy a few months later. He had heard that they had to do that per an agreement with the MN Attorney General’s office. Like maybe they were promising things as part of the close that they later denied? Anybody else heard something like that?
Denny was clearly in over his head. He loved to promote himself here locally. Didn’t he have a call-in show on the conservative radio news channel for a while? He sure fancied himself as t he uber-successful, self-made man. The tide went out, though, and he’s not wearing any clothes. If anything I’m glad that every Metro Transit bus is no longer plastered with his ads.
Just suppose if we sold cars to people who need’t and could aford them, that only 10 million a year would be sold. If that is the number, perhaps all car mfgs. and retailers could get down to an honest forthright way of selling the cars and trucks. If you have to put some money or a trade down and if you buy a well valued new or used car that has not been over produced, there should be a reasonable expectation that you will not be upside down during the life of the payments and you will have some trade value down the road. That was the old way, will it ever return, I hope so.
$550 Million?
McNamara Buick on Long Island took GMAC for nearly the same amount…in 1987.
Nuthin’s new here.
I wonder how much Heckler contributed to the MN legislature to ensure his dealership protection racket got so little notice.
There are good dealers out there. But given the special protection car dealers enjoy at the state level, the worst sort of brand destroying behavior cannot be effectively controlled.
Hopefully, the federal bankruptcy judge that gets the Chrysler case will have the sense to approve an exit plan that carpet bombs all franchisees into oblivion. I’m sympathetic to the honorable dealers out there, but they did pick a broken business model. I’m sure there were good Germans living in Dresden in early ’45, but what had to be done had to be done.
Don’t be surprised if some additional ‘shockers’ come to light from CFC in the future.
The absence of risk management expected of a captive finance company isn’t isolated to Heckler: it’s long been accepted as fact that one of the big consolidators of auto franchises in the country is fueled by CFC dough.
As with Heckler, CFC didn’t limit their exposure to simply CLLC franchises or floorplanning. CFC dough wrote checks for franchises and new facilities for numerous franchises on GM’s ‘hit list’ (Saturn, Saab, Hummer, etc.), as well as second tier imports.
It was a running joke with CFC people during the DCX days that their beloved ‘pets’ could bring down the entire firm if something went south.
Are we ‘south’ enough to worry, yet?
Jerry Lundegaard strikes again. I wonder if they put clearcoat on all of their cars?
Sherman Lin…no! It’s Rustcoat or more likely, Rustkote. Anyway, the hell with Chrysler. If they are inept enough to get involved with this fiasco, they truly deserve to go die.
I agree with John Horner, this downturn will at least put the crooks and bumblers that can get buy in a boom out of business. Now, if we can only implement some kind of asset stripping (I am looking at you Richard Fuld of Lehman, you POS.)
The analogy often used is a lake and water. Drain half of the water and suddenly you can see the big boulders which were previously hidden just below the surface. We are not done seeing shockingly big rocks revealed.
What is this “lake” you speak of that has a “drain”?
I thought the saying was that when the tide goes out we see how many people were swimming naked…
Of course, 1) that’s pretty much what some beaches are for, and 2) I’m pretty sure I don’t want to see Denny naked.