Canadian Judge: Forget Arbitration, Culled Dealers Can Sue GM

Edward Niedermeyer
by Edward Niedermeyer
canadian judge forget arbitration culled dealers can sue gm

Automotive News [sub] reports that 19 rejected Canadian GM dealers have been given the green light to sue GM as a class, rather than go through the arbitration process that is being used to resolve dealer cull disputes in the US. The dealers are suing GM for breach of their dealer agreements, and for failing to provide compensation beyond wind-down costs. They argue that the arbitration process would be expensive for dealers, non-transparent to the taxpayers who funded GM’s reorganization, and would put GM at an unfair advantage.

One dealer explains:

For GM it would have been divide and conquer and control the flow of information.

Superior Court Judge Sarah Pepall agreed, ruling that the dealers have a common cause against GM and should be able to pursue their claims jointly in public court. Another lawsuit by Canadian GM dealers, naming both General Motors and its Canadian counsel, and alleging misconduct in the execution of the Canadian dealer cull is still pending. The very public drama between GM and its dealers that began with its bankruptcy-era cull of 1,573 dealerships may be nearly a year old now, but it’s showing few signs of stopping any time soon.

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6 of 8 comments
  • Jberger Jberger on Apr 23, 2010

    There is a certain irony that the dealers who required their customers to sign arbitration agreements are also being forced to arbitrate their disagreements with GM Corporate.

    • Porschespeed Porschespeed on Apr 24, 2010

      Hallelujah!, While the irony is delicious, the BK really should have eliminated this as an option. Proving once again that the blind chick's scales are balanced merely by whomever throws the biggest pile of cash on one side. Even in Canada.

  • Wmba Wmba on Apr 24, 2010

    BTW, nice picture of rural Quebec in high summer, Ed. GM Canada did not file for bankruptcy. You are applying US sensibilities to a different situation entirely.

  • Olddavid Olddavid on Apr 24, 2010

    Being a dual citizen, I spent many years working north of the border. Franchise laws vary from province to province, and are much more stringent than in the US, as is the market. Hell, I know of a Mercury dealer in Alberta that sold 300+ new cars last year. There are states that don't achieve that number. The comparison is invalid.

    • Lemmy-powered Lemmy-powered on Apr 24, 2010

      A Mercury dealer in Canada? Doubt it. Mercury has been gone from Canuckistan for a long time.

  • Geo. Levecque Geo. Levecque on Apr 24, 2010

    Somehow there would be no dealer anywhere in this Country(Canada) selling the Mercury brand, it was killed years ago by Ford! Also the picture may be of Quebec in Winter, its certainly not Winter now, temperature this week in Eastern Canada averaged 16 to 20C! Warmer weather on the way too!