Until now, owning an Oldsmobile dealership was kind of like Ford’s logo-and-all, pre-meltdown mortgage: at the time it seemed bad, but history proved that the alternative was worse. After all, the Olds wind-down paid dealers up to $4 million to go away. Only now, several Oldsmobile dealers are getting a little taste of what GM’s less fortunate, bankruptcy-culled dealers have been put through. The Detroit News reports that “a handful” of Olds dealers are still owed annuity payments from the brandicide, and GM is filing those claims as “unsecured” debts of old, bad GM. Nobody likes being shorted in the neighborhood of $20K, but at least Olds dealers got something, right? Shouldn’t they count themselves lucky to be free of GM with any compensation at all? Not according to their lawyer . . .
“It is absolutely atrocious … that they would be considered an unsecured claim, which means those dealers are going to be lucky to get pennies on the dollar. It is just outrageous that they would not attempt to meet their obligations under those settlements.”
So argues Richard Sox, who represented Olds dealers during the Oldsmobile euthanasia. “We will comply with whatever the bankruptcy court provides to us in terms of handling those matters,” shoot back GM spokesfolks. And so far that approach has worked well enough to make the Olds shutdown look like charity.
It all depends on what their agreement was with GM. It would not surprise me that those agreements were pretty much take it or leave it offerings from GM legal, and I would be surprised if the dealers had the leverage to get GM to offer security for the payment. I would also be surprised if the dealers worried much about GM’s solvency at the time.
When somebody who owes you money goes into the tank, its a bad thing. But that by itself does not make your debt secured.
Hmmm … sign in window left of door says Cadillac, so does logo on wall and car on floor … so they were dualing way back then too, eh?
They took the annuities (spread payments) for tax purposes and at that point they should have been looked at as an investment (making money by avoiding taxes). Time is risk.
When you retire and the company you worked for goes belly-up, you will discover that the promises made to you via contract is worth about as much as the paper it was printed on.
Oldsmobile, like many GM retirees, is discovering this very ugly fact of life.
They needed to have asked for the $4 million up front so that the dealers could invest in a growing company. When they decided not to do so, they made a poor investment with GM.
That didn’t work out so well, did it?
I wonder how Ransom E Olds would feel today after driving cross country month after month, passionately promoting his car, making it a success, selling it to GM in 1908, and in 2000, GM decides to kill it. It gave us the 442, the Cutlass, and of course the Vista Cruiser wagon.
GM you lost the passion, that’s why the car is dead. Remember that going forward.
When GM killed one of the oldest marques in the business, that is when I knew they were circling the drain.
The crazy thing is that GM killed Olds and kept Saturn. Boy was that ever a big mistake. But then again, starting Saturn in the first place was a huge strategic error. Setting up an entire separate sales channel for Hummer was another strategic blunder.
” … sign in window left of door says Cadillac, so does logo on wall and car on floor … so they were dualing way back then too, eh”
Cadillac – Oldsmobile dealers used to be pretty common in the 1960s when I was a kid. In fact, San Jose, CA’s biggest Caddy dealer (Smythe) was a dual Cadillac-Olds dealer up until the day Olds was shut down. Oldsmobile’s as the lower end offering in Cadillac showrooms made a lot more sense than the relatively short lived LaSalle brand did.
CyCarConsulting, Ransom E. Olds did not sell Oldsmobile to GM in 1908, or any other year, for that matter. He left the Olds Motor Works in 1904, and started up Reo the same year.
Andy D, John Horner, my sentiments exactly.
I will keep reminding everyone that the reason GM chose Olds to die, the ONLY reason, was that Olds had the smallest number of stand alone dealerships. Most were dualed with someone else (like Caddy in the pic above), many were trippled (is that a word?). So it cost GM less money in the end. Would Saturn have been a better choice? Well, the brand still had some upside to it compared to Olds, but the big reason was that it had 400+ STAND ALONE dealerships, and everyone of them would have wanted – and got – BIG money from GM to shut them down. It’s all about the dollars.
I wonder who owns the intellectual property associated with the Oldsmobile brand, the “new” GM or the remnant stuck with the distressed assets?
I cant even for the life of me.. understand nor recognize fully the problems that GM will forever have with Oldsmobile.
I will say..
Im about 30yrs away from ever seeing such a beaut as whats in that pic.