Jones: General Motors Has a Plan: Intentionally Killing Auto Dealerships

As Auto Giant Seeks Billions in Additional Federal Aid, GM Engaging in "Egregious and Fraudulent Conduct" says Former U.S. Attorney

BIRMINGHAM, Ala., March 11 -- Former U.S. Attorney G. Douglas Jones accused embattled automaker General Motors of engaging in "egregious and fraudulent conduct" that is forcing good standing auto dealerships to close their doors.

"GM has been under intense political fire for not having a plan. But the public needs to know that GM has a plan: to get taxpayer money to prop up their own finances while sticking it to loyal and family-owned auto dealerships," said Jones.

"In recent months, GM appears to have intentionally engaged in deceptive and unsavory business practices against its own auto dealerships," added Jones. "GM and its financing arm GMAC have arbitrarily and capriciously altered dealership financing terms and requirements, and have wrongfully withheld rebates, warranty claims, and funds due to its dealerships under established franchise agreements in an effort to drive them out of business and thus allowing GM to avoid their legal and contractual obligations to these dealers."

Jones, who captured national attention as a U.S. Attorney in 2001 for successfully re-opening and prosecuting the 16th Street Baptist Church bombing of 1963, is leading a legal challenge against GM and GMAC on behalf of a family-owned Chevrolet dealership that has been serving the Hartselle, Alabama area for over 52 years.

In a 12-page complaint filed late last month by Jones and attorney Jeffrey E. Friedman, GM and GMAC are accused of trying to shakedown a $300,000 cash security deposit and withholding over $160,000 in rebates and warranty funds from the family-owned dealership, Abercrombie Chevrolet.

According to the complaint, GM knew the dealership could not fulfill the unreasonable and unconscionable credit obligation of posting $300,000 cash. Even more stunning, GM rejected an offer for a second mortgage on Abercrombie's property which had over $1.3 million in equity.

Jones noted, "GM may need to reduce the number of dealerships in order to survive the financial crisis that they have gotten themselves into, but GM should not be allowed to force these dealerships out of business and also avoid the legal and contractual obligations they have to their loyal dealers who did not create this mess."

"As GM holds out its hand for a second helping of federal aid, GM is hypocritically forcing good-standing auto dealerships out of business by engaging in egregious and fraudulent conduct," said Jones, who is now a partner with the Haskell, Slaughter, Young and Rediker law firm in Birmingham, Alabama.

Jones served as U.S. Attorney for the Northern District of Alabama from 1997 through 2001. Jeff Friedman is a principal of the Friedman, Leak, Dazzio, Zulanas, and Bowling law firm based in Birmingham.

  To schedule media interviews or for additional information, please contact Tyler Florence directly at tmf@hsy.com or call (205) 834-9797

  Contact:  Tyler Florence, tmf@hsy.com
            Phone (205) 834-9797