An automobile dealer that has sold Cadillacs in the Indianapolis area for almost five decades has lost its franchise to sell new models of the famous luxury brand.
Tutwiler Cadillac, near 101st and Meridian streets, changed its name to Tutwiler Automotive earlier this fall when its General Motors franchise agreement expired. The dealership, which has sold Cadillacs in Indianapolis since 1964, will remain in business selling used cars.
It was one of dozens of dealerships in Indiana and hundreds nationwide whose franchises GM discontinued in July 2009 after the company filed for bankruptcy. GM, which was buoyed with $50 billion in taxpayer funds, since has improved its financial state; its share price has ranged between $33 and $36 since the company’s stock went back on the market last month.
But that hasn’t changed the fate of outfits such as Tutwiler. The dealership fought to keep its franchise through arbitration with GM that ended this summer. Tutwiler prevailed on some fronts of its argument but lost the overall case, said Ronald C. Smith, a Stewart & Irwin attorney who represented Tutwiler in the case.
Smith would not elaborate on details of Tutwiler’s argument. But he said the company’s market plan was to have one area dealership offering Cadillacs, similar to the one-dealer strategy employed by other luxury automakers such as Lexus, Mercedes and Infinity. GM officials would not comment on the strategy.
Another local dealer, Lockhart Cadillac, sells the vehicles from its locations on North Keystone Avenue in Indianapolis and in Greenwood.
"You've got two quality families who have been on the local auto scene for decades," Smith said. "It's unfortunate the manufacturer decided it had to choose."
Nationwide, 1,233 GM franchise agreements were terminated on Oct. 31. The number of active franchises in Indiana has declined from 400 last December to 250 at the end of last month, said Ryndee Carney, a GM spokeswoman. The number of GM dealerships also has dropped from 170 to 138 statewide.
Carney would not comment on specific dealerships because the company did not publicly identify which dealers lost their franchises. But Carney said GM generally based its decisions about ending franchises on factors such as sales, profitability, working capital, location and customer satisfaction.
“We felt we came through the process with the right number of dealers,” Carney said. “We think the makeup and size of dealer network we have today gives us a competitive advantage.”
However, a July 2010 report by the special inspector general for the Troubled Asset Relief Program showed that those criteria were applied inconsistently.
Mart Tutwiler, Carmel, now owns the dealership that his father, Ed, started after moving to Indianapolis from Charleston, W.V. Mart's son Ed, the general manager at Tutwiler, said the termination “was a shock,” but the company would use the opportunity to grow the dealership’s pre-owned business.
In addition to selling used cars, Tutwiler will continue selling parts and performing non-warranty service work.
“We have customers that are upset with the decision for closure, but I want them to know that we are still here. Our doors are open,” the general manager said. “We look at this as an opportunity.”