Fitzgerald Auto Malls Punished for Being Honest

Jan 27, 2010, 09:10 ET from Fitzgerald Auto Malls

KENSINGTON, Md., Jan. 27 /PRNewswire-USNewswire/ -- You do everything correctly; you treat people fairly; you provide a public benefit to your community.  Can you actually be punished for being honest? In the case of Jack Fitzgerald of Fitzgerald Auto Malls, you certainly can.  

Early last year, GM and Chrysler cut thousands of dealer franchises.  Fitzgerald, along with other dealers, founded The Committee to Restore Dealer Rights (CRDR) to challenge the White House's Auto Task Force's recommendation to cut dealers.  And after a determined battle, CRDR achieved success in December 2009. Congress has enacted new legislation allowing dealers to appeal the closures and request binding arbitration on the issue of re-instituting their franchises.

Fitzgerald Auto Malls has lost five Chrysler dealerships due to closure and could potentially lose GM franchises in the next round of closures.  The American Arbitration Association has been named to handle the claims.  To date, more than 1,000 affected dealers have requested arbitration.   The arbitrator will measure, among other criteria, the economic benefit the dealership provides to the public when deciding whether to reinstate the dealership franchise.  

Fitzgerald has worked to make Fitzgerald Auto Malls an economic and community anchor.  "We have an opportunity to make a strong case to win back our franchises by demonstrating the benefit we provide to the community," Fitzgerald states.  "The pricing information on our website, the educational information on how to buy a car, and our community Child Car Seat and Child ID programs are just a few ways we provide a public benefit.  We need the help of our friends, loyal customers and leaders in the community to help us stay in business and win the arbitration.  By writing letters of support to the arbitrator and sending them to us, we hope consumers will advocate for us now."

By law, the arbitration process must be finalized by June 14, 2010 so the ultimate success or failure of Fitzgerald's efforts will be known by early summer.  

The Task Force and GM and Chrysler executives claimed that cutting dealers was a way for manufacturers to become profitable.  Fitzgerald and his dealer group presented the facts taking the opposite position.  They argued and proved that by reducing the number of their dealers, the manufacturers would actually lose market share.  Both GM and Chrysler saw sales drop by 33%(1) in the fourth quarter of 2009.

Fitzgerald goes on to explain, "Competition is good for consumers.  More competition means lower prices for consumers.  It was the poor quality of products that GM and Chrysler tried to sell that ultimately led to bankruptcy.  The manufacturers went bankrupt...not the dealers."

The personal creed of Jack Fitzgerald has always been to do business the "FitzWay" -- with honesty, respect and dignity.  Fitzgerald believes the manufacturers have singled him out because of his pro-consumer way of doing business.  

Fitzgerald Auto Malls has stressed the importance of consumer education and has supported efforts to strengthen local laws to protect consumers.  The FitzMall.com website provides actual, invoice prices that many manufacturers have asked Fitzgerald to remove and keep secret.  These posted prices have become a benchmark for consumers nationwide, as evidenced on Edmunds.com forums.

"I have fought the good fight on behalf of consumers in our region and across the country for years, going head-to-head with manufacturers over warranty claims," Fitzgerald explains, "We teach consumers how to be treated fairly when buying a car.  GM and Chrysler have always thought of me as a thorn in their side and that's most likely why I was singled out in the closure of my franchises."

(1) Automotive News Data Center

SOURCE Fitzgerald Auto Malls