Why Didn't GM Cut Off Bill Heard?
Money. The Georgia-based 14-store Bill Heard franchise has generated massive volume despite– or because of– an entire range of deceptive practices. As Automotive News [sub] reports, "With group revenues of $2.13 billion in 2007, Bill Heard Enterprises, of Columbus, Ga., ranks No. 13 on Automotive News' list of the top 125 U.S. dealership groups based on new retail units sold." Yes, well, "Heard's Town Center dealership in Kennesaw, Ga., lied to third-party lenders about customers' incomes to increase the likelihood that the vehicles would be financed. Bill Heard's flagship Chevrolet store in Columbus, Ga., forged consumers' signatures on agreements without their knowledge or permission. Town Center inflated the loaned value of vehicles by telling third-party lenders the vehicles carried extra features and options that they did not — an illegal practice known as "power booking." In September 2007, Heard subsidiary Tom Jumper Chevrolet sent a direct mail advertisement informing recipients they might receive financing at interest rates as low as 3.9 percent. The ad went only to people with low credit scores who were unlikely to qualify for such terms." Not to mention a fake recall notice and all the other "normal" shady sales techniques. While these and other matters work their way through the courts, it seems Billy Boy's screwed GMAC one too many times. GM's captive lender has pulled the plug on Heard's biz. How long before the class action consumer lawyers come knocking on GM's door, wanting to know what The General knew about "Mr. Volume" and when they knew it.
More by Robert Farago
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GM figured out how use a form of the "learned intermediary" in order to push their products on people who couldn't afford them. In the end GM is probably better off b/c a sale is a sale and it doesn't get taken away if the repo man visits those buyers.
As a complete outsider in Australia I thought I'd have a look at billheard.com. Jesus Christ...! That is the cheesiest, sleaziest low-rent auto website I have ever seen. It looks more like the site of someone trying to get you to buy pictures of arses and boobies than to buy automobiles. Seriously who in their right mind would go there and be reassured that this is an honest and trustworthy dealer to do business with?
I have first hand knowledge of these horse thieves. Bought an 05 Trailblazer in Nov of that year at the Buford (Mall of Georgia) store. One of the worst decisions of my life. I traded it in for a Mazda 3i 10 months later.
Hey, remember that GM books the car as sold when the dealer takes it. They do not take cars back for any reason unless there is a dealer termination. In this case Heard will be able to return to GM all the new and unsold 2009 model year vehicles. GM will not take any 2008 or older model year cars/trucks or any used vehicles. Based on current dealer inventories, I am guessing Heard has 80% of grounded stock in 2008 model year cars which they or some bank now owns. They can try to sell them to another dealer but unlike used cars, only franchised dealers can sell the new models. This is the real bad news. Bankruptcy is probably next. GM does not have all that much control over their dealers. State franchise law is generally on the side of the dealer in franchise disputes and for GM to terminate a dealer for cause takes a lot of legal effort and expense. GM will use allocation and other incentive to keep dealers in line but from time to time, guys like Heard keep rolling along. Never mind that Sonic is facing a big problem with identity theft at their (now closed) Los Angeles Cadillac dealership but an AutoNation Chevy store in El Monte, CA was the star in a "hidden camera" sting that sent several guys to the pokey. It's everywhere, the consumer has to go with the gut feel If it is too good to be true....