B. H. O.
2014-07-02 19:23:05 UTC
TORONTO - A group of 17 Toronto-area General Motors dealers is suing
the automaker, claiming GM failed to provide them with adequate
financial support despite receiving million of dollars in aid from
taxpayers.
The Canadian dealers say they have been struggling to make a profit
amid a big drop in market share and sluggish sales, and have spent
years asking General Motors of Canada Ltd. and its parent company in
the U.S., General Motors Corp., for help.
But, they say, none of the $10-billion bailout provided to the company
by the Canadian and Ontario governments as part of joint funding with
the U.S. during the financial crisis in 2009 has been spent in Canada.
That has created a particular hardship for dealers in the Greater
Toronto Area, a major urban market where it is expensive to operate,
the lawsuit says.
"Despite the fact that the Canadian and Ontario governments provided
bailout funds to GMCL based on the representations made and assurances
given by GM and GMCL ... all of the $10 billion received from Canadian
taxpayers . . . (was) directed to GM in the United States," the court
filing said.
"At GM's direction and insistence, GMCL ceded the right to allocate
the bailout funds it received from the Canadian and Ontario
governments to its parent company in the United States, and GM in turn
prioritized the needs of its own dealer network over those of Canadian
dealers" despite initial suggestions that the funding would benefit
both markets.
The dealers operate in what they describe as the third-largest market
in North America and say GM is aware that the GTA as a market is
comparable to major U.S. markets such as New York, New Jersey, San
Francisco and Los Angeles.
But according to the court filing, the company did nothing to address
declining market share in Canada, or to stop the loss of customers
from brands like Pontiac, which were eliminated as part of GM's
restructuring.
The dealers say market share in the GTA has fallen markedly since 2008
- from 12.5 per cent to an all-time low of 5.63 per cent in 2013.
Without adequate support, the dealers say their business is not viable
in the long run, especially since they are required by the company to
invest millions of dollars in their dealerships in renovations to meet
new image standards.
GM spokeswoman Adria MacKenzie described the allegations in the
lawsuit, which have yet to be proven in court, as being "without
merit."
"We plan to defend against them vigorously," she said. "As the matter
is before the courts, we cannot provide any further comment. We will
continue to be focused on our customers."
The lawsuit was filed last week with the Ontario Superior Court of
Justice.
In it, the dealers are asking that GM provide them with "an
appropriate level of financial support and assistance" and are seeking
$400 million in damages.
They are also asking for a declaration from the companies that they
"breached their duties to deal fairly and act in good faith" toward
the dealers.
The GTA lawsuit is the latest in a string of legal battles for the
company, including an ongoing U.S. suit in which GM links 13 deaths to
a defective ignition switch in cars such as the Chevrolet Cobalt and
Saturn Ion. Trial lawyers and lawmakers say claims of wrongful death
and injury could total in the hundreds.
GM has agreed to pay compensation to all victims of crashes in those
cars under a program announced Monday, provided they can prove the
ignition switches caused the accidents.
Kenneth Feinberg, one of the top compensation experts in the U.S. who
is running the plan, said GM has placed no limit on the total amount
he can pay to injured people or relatives of those killed. And he
alone not GM will decide how much they each will get, even though
he is being paid by the company and it didn't like some of the
program's provisions.
Feinberg wouldn't estimate the ultimate cost for GM, but based on the
methodology he plans to employ, a large amount of claims could mean a
sum running into the hundreds of millions of dollars, if not billions.
http://www.huffingtonpost.ca/2014/06/30/gm-dealers-lawsuit-canada_n_554
4370.html?utm_hp_ref=canada-business
With files from The Associated Press
-----------------------------------------------------------------------
---------------- Did Canada and Ontario ever get that money back?
$400 million is a drop in the bucket for GM. They lose taxpayer moneythe automaker, claiming GM failed to provide them with adequate
financial support despite receiving million of dollars in aid from
taxpayers.
The Canadian dealers say they have been struggling to make a profit
amid a big drop in market share and sluggish sales, and have spent
years asking General Motors of Canada Ltd. and its parent company in
the U.S., General Motors Corp., for help.
But, they say, none of the $10-billion bailout provided to the company
by the Canadian and Ontario governments as part of joint funding with
the U.S. during the financial crisis in 2009 has been spent in Canada.
That has created a particular hardship for dealers in the Greater
Toronto Area, a major urban market where it is expensive to operate,
the lawsuit says.
"Despite the fact that the Canadian and Ontario governments provided
bailout funds to GMCL based on the representations made and assurances
given by GM and GMCL ... all of the $10 billion received from Canadian
taxpayers . . . (was) directed to GM in the United States," the court
filing said.
"At GM's direction and insistence, GMCL ceded the right to allocate
the bailout funds it received from the Canadian and Ontario
governments to its parent company in the United States, and GM in turn
prioritized the needs of its own dealer network over those of Canadian
dealers" despite initial suggestions that the funding would benefit
both markets.
The dealers operate in what they describe as the third-largest market
in North America and say GM is aware that the GTA as a market is
comparable to major U.S. markets such as New York, New Jersey, San
Francisco and Los Angeles.
But according to the court filing, the company did nothing to address
declining market share in Canada, or to stop the loss of customers
from brands like Pontiac, which were eliminated as part of GM's
restructuring.
The dealers say market share in the GTA has fallen markedly since 2008
- from 12.5 per cent to an all-time low of 5.63 per cent in 2013.
Without adequate support, the dealers say their business is not viable
in the long run, especially since they are required by the company to
invest millions of dollars in their dealerships in renovations to meet
new image standards.
GM spokeswoman Adria MacKenzie described the allegations in the
lawsuit, which have yet to be proven in court, as being "without
merit."
"We plan to defend against them vigorously," she said. "As the matter
is before the courts, we cannot provide any further comment. We will
continue to be focused on our customers."
The lawsuit was filed last week with the Ontario Superior Court of
Justice.
In it, the dealers are asking that GM provide them with "an
appropriate level of financial support and assistance" and are seeking
$400 million in damages.
They are also asking for a declaration from the companies that they
"breached their duties to deal fairly and act in good faith" toward
the dealers.
The GTA lawsuit is the latest in a string of legal battles for the
company, including an ongoing U.S. suit in which GM links 13 deaths to
a defective ignition switch in cars such as the Chevrolet Cobalt and
Saturn Ion. Trial lawyers and lawmakers say claims of wrongful death
and injury could total in the hundreds.
GM has agreed to pay compensation to all victims of crashes in those
cars under a program announced Monday, provided they can prove the
ignition switches caused the accidents.
Kenneth Feinberg, one of the top compensation experts in the U.S. who
is running the plan, said GM has placed no limit on the total amount
he can pay to injured people or relatives of those killed. And he
alone not GM will decide how much they each will get, even though
he is being paid by the company and it didn't like some of the
program's provisions.
Feinberg wouldn't estimate the ultimate cost for GM, but based on the
methodology he plans to employ, a large amount of claims could mean a
sum running into the hundreds of millions of dollars, if not billions.
http://www.huffingtonpost.ca/2014/06/30/gm-dealers-lawsuit-canada_n_554
4370.html?utm_hp_ref=canada-business
With files from The Associated Press
-----------------------------------------------------------------------
---------------- Did Canada and Ontario ever get that money back?
like it's going out of style.
The U.S.A. took an $11 billion TARP loss on GM. That's a lot of money.
GM just announced they would be recalling 7.5 million cars. This is in
addition to the two recalls they already have in progress involving
millions of cars.
This is the company Barack Obama remade in his image, and put a woman in
charge.