SACRAMENTO, CA — Ford Motor Co. wins the first round of a ground-breaking dispute over whether a dealership's sale to a large publicly owned dealer group can be blocked because the group elsewhere allegedly runs “under-performing” stores of the same brand.
California Judge Merilyn Wong upheld the auto maker's refusal to allow Asbury Automotive Group, of Stamford, CT, to purchase Bob Baker Ford in San Diego. Ford contends four of Asbury's current seven Ford stores have missed sales and customer-satisfaction targets.
The California New Motor Vehicle Board had assigned the case to Wong as an administrative judge. The board on June 17 reviewed her decision and remanded it back to her for clarification in the dispute between Ford and veteran megadealer Robert H. Baker.
Baker took legal action against Ford for nixing the franchise transfer to Asbury, part of a planned $88 million deal to sell his 6-dealership, 9-franchise Baker Auto Group.
If the Board approves the judge's decision, Baker could take his petition to the state courts. Likewise, Ford could turn to the courts if the judge's ruling is overturned.
Judge Wong declares that because of concerns over unsatisfactory performances by four of Asbury's Ford stores, the auto maker is in compliance with a state franchise law's stipulation that approval of dealership sales or transfers could not be “unreasonably withheld” by a franchiser.
Six other of Baker's nine franchisers — Chevrolet, Chrysler, Jeep, Mitsubishi, Subaru and Volkswagen — had approved the Baker-Asbury deal.
Ford has flatly denied the sale of its store. Toyota and its Lexus Div. have delayed action, reportedly pending outcome of the Ford matter.
Though not a direct party in the legal proceeding, Asbury is voicing disappointment over the judge's ruling. Asbury President and CEO Kenneth B. Gilman contends, “Asbury's performance at its Ford stores has been better than Ford's overall performance in unit sales.”
A publicly owned group since 2002, Asbury posted revenues of $4.5 billion last year and ranked fifth on the Ward's Megadealer 100. The Baker Group ranked 61st.