Despite securing 30,000 new customers as a General Motors franchisee between 1972 and 1995, Dick Gidron is now on the outside looking in: He is filing a $357 million lawsuit against GM.
Gidron, who was the owner of Dick Gidron Cadillac (No. 59 on the BE AUTO DEALER 100 list) in the Bronx, New York, is charging that GM offered financial subsidies to other dealerships but not to him. His suit also claims civil rights violations, alleging that the automaker was racially motivated when pinpointing dealerships to be eliminated.
According to Gidron, the dispute started when GM informed him that his dealership should be relocated as part of its Project 2000 program. Gidron was told that it should be moved to a location that might be more profitable for both him and GM. Although Gidron says he initially balked at the mandate, he decided to cooperate. But negotiations fell through after his dealership was closed for several months over a tax dispute with the IRS in 1995. By the time the IRS claim had been settled, GM notified him that his franchise had been committed to another dealer. Now Gidron, who still owns a Ford dealership, is suing GM in New York State Supreme Court. “I think their actions are outrageous. I’m one of GM’s most successful franchised dealers,” he says.
The suit alleges GM discriminates by using crime statistics and per- capita income to target franchises for elimination.
“General Motors’ actions here amount to nothing more than the racial redlining of an entire community,” says former New York City Mayor David Dinkins, who is one of Gidron’s attorneys.
But GM, which has since opened another dealership in ‘the Bronx, contends that race played no part in its decision to revoke Gidron’s franchise. GM spokesman Kyle Johnson says once Gidron’s dealership was closed by the IRS, he effectively violated his franchise agreement with GM and it was no longer obligated to work with him. GM, he adds, offers financial subsidies to its franchisees on a case-by-case basis. Approximately 1.2% of GM’s dealerships are owned by African Americans.