Zero Hedge covers a court hearing involving terminated Chrysler dealers with some follow-up on its previous analysis of Dealergate and possible Clinton-tied cronyism in Arkansas.
Tyler Durden points to one very interesting declaration from Ethel L. Cook, a Chrysler dealer based in Little Rock. Click on his post for the PDF link to the full testimony, but here’s an excerpt:
Having reviewed the pattern of assumption and rejection of dealers throughout their region, I have detected a pattern: In every market where there is a dealership connected with former Penske Automotive executive Steve Landers, or his new automotive partnership with “Mac” McLarty (former Chief of Staff for President Clinton) and Robert L. Johnson (majority owner of the Charlotte Bobcats), the competitors are rejected.
In the Little Rock, Landers Chrysler Dodge Jeep is located far out of town in Benton, Arkansas. Nevertheless, the two Little Rock dealers, Cook and Crain were rejected.
In the Fayetteville, Arkansas area, Landers-McLarty Dodge Chrysler Jeep is located far out of town in Bentonville, Arkansas. Competitors Springdale Dodge Chrysler, Steve Smith County Jeep and Jones Brothers were all rejected.
In the Shreveport, Louisiana market, Lee’s Summit Dodge Chrysler Jeep (a Landers McLarty dealership) is located in Bossier City, Louisiana. Both competitive dealers, Claude de Beaux in Vivian, Louisiana and Greater Birmingham Dodge Chrysler in Shreveport were rejected.
In the Springfield, Missouri market, Tri-Lakes Motors (a Landers-McLarty dealership) is located in Branson, Missouri. Competitors Heritage Chrysler Jeep in Ozark, Missouri and Ramsay Motor Company in Harrison, Arkansas were rejected. A pattern seems to be emerging. Everywhere there is a Landers-McLarty dealership, Chrysler has rejected the competition.
In the Huntsville, Alabama market, Landers McLarty Dodge Chrysler Jeep, is located in Huntsville. Competitor Cloverleaf Chrysler Dodge Jeep was rejected.
Favoritism and cronyism towards preferred dealer group is not a valid exercise of business judgment.