Illinois Dealers Sue to Block GM’s Ad Shift

More than 60 General Motors dealerships in Illinois have filed suit against the automaker in a last-ditch effort to block GM’s revised field marketing program, set to take effect April 1.
GM’s program replaces the previous marketing arrangement under which marketing money collected by GM from dealers (1 percent of vehicle sales) was returned to dealer marketing groups. Under the new guidelines, those marketing dollars remain in GM’s hands to fund local programs, with GM’s Local Communications unit handling local
media buying. The shift means approximately 60 agencies will lose their local dealer group accounts [Adweek, Dec. 21].
GM declined comment on the suit.
Filed in Cook County (Ill.) Circuit Court on Jan. 26 by the dealers and their dealer trade associations, the suit alleges GM’s new field marketing program violates the Illinois Motor Vehicle Franchise Act.
Specifically, the suit cites the state law’s stricture against an automobile manufacturer requiring “a franchisee to participate … in an advertising campaign at the expense of the franchisee.”
Claiming the new program is being implemented unilaterally by GM without enough input from dealers, the suit also alleges the automaker is breaching the Illinois law’s prohibition against auto manufacturers’ actions that are “in bad faith or unconscionable” with respect to franchisees.
Samuel Skinner, a former Secretary of Transportation in the Clinton administration now with the Chicago law firm of Hopkins & Sutter, is representing the dealers.
“This money is the dealers’ money, not General Motors’,” Skinner said in a statement. “We hope to resolve this matter quickly and let the dealers get back to their business of addressing the needs of the consumer.”
The suit asks the court to prevent GM from collecting the assessments from the dealers, and seeks unspecified monetary damages.