Eric Dickerson, the Republican trying to unseat Julia Carson in the 7th congressional District, plans to sell his north-side Buick dealership to Ed Martin Automotive Group as early as next month.
But the dealership could become a campaign liability even if it's sold.
Fifth Third Bank alleges in a lawsuit that the store defaulted on loans to buy vehicle inventory and that Dickerson himself is on the hook for more than $2 million.
Dickerson disputes allegations the Cincinnati-based bank made in the July 11 suit filed in Marion Superior Court.
And he discounts the suggestion that the sale of the dealership has anything to do with the lawsuit. He said sale talks were in the works long before the lawsuit and that an agreement recently was ironed out with Fifth Third that should settle matters.
Dickerson, one of the region's few minority car dealers, said the sale is driven largely by General Motors Corp.'s push to combine its stagnant Buick brand with its Pontiac and GMC lines nationwide. He has no other car lines based at his 7250 N. Keystone Ave. dealership.
Dickerson first complained more than two years ago about GM's pressure to sell, but is now more open to the idea.
"GM and Ed Martin made me an offer I thought was very fair," said Dickerson, who declined to reveal the sale price. An Ed Martin executive also declined comment, but said the plan was being reviewed by General Motors.
The other reason Dickerson cited for selling the dealership he bought in 1999, from Ogle-Tucker Buick, is his run for Congress.
He's been campaigning in the Indianapolis area aboard a 45-foot recreational vehicle–a la Mitch Daniels' gubernatorial campaign.
For years, Dickerson boasted in radio advertisements of his hands-on, daily role at the Buick store. Since then, he's opened a body shop in Westfield–Westfield Collision Repair–and has been driving flat-out to beat Carson.
"My son has basically been running the dealership for over a year … . I don't know I can devote that kind of attention to it," he said. "I have too many irons in the fire."
U.S. Buick sales have continued to decline–down about 20 percent in the first seven months of this year. GM now sells more Buicks in China–versions of the Buick Century/Regal are everywhere–than in its own back yard.
Some auto analysts predict Buick will follow Oldsmobile as the next GM brand facing extinction if new Buick models aren't a hit. According to Autoweek, the average Buick dealer last October sold only four new vehicles a month. Consumer appetites for new models such as the Lucerne may determine its fate.
Dickerson's sales numbers aren't publicly available. Fifth Third's court records point to about $5.5 million in loans Dickerson's dealership obtained in early 2005 to buy new and used inventory.
Fifth Third alleges repayment of the notes was not made within "applicable time frames," which it says triggered default. The bank also alleges the loans were in default because neither the dealership nor Dickerson filed annual financial and tax statements for 2005.
"We have never, ever missed a loan payment with Fifth Third Bank, ever," Dickerson said.
Alan Statman, a Cincinnati attorney representing Fifth Third, said Dickerson guaranteed $2 million of the dealership's indebtedness. Dickerson's guarantee, plus court costs and attorney's fees, is the amount the suit seeks.
Statman said he was hopeful both sides could resolve issues without further litigation.
Neither Statman nor Dickerson's attorney returned subsequent phone calls to confirm that a settlement had been reached.
Word that he was engaged in sale talks might have precipitated the bank's filing, Dickerson said, adding that lenders already are scrutinizing GM given its deteriorating financial condition and credit ratings.
"All the banks right now are nervous about General Motors."
Dickerson, 57, probably doesn't have to worry about the litigation knocking the wheels off his campaign unless the race is a tight one, said Stephen Graham, a political science professor at the University of Indianapolis who follows local races.
"Republican challengers in this district have always been sort of sacrificial lambs to begin with," he said of Democratic dominance in the 7th District. Carson has been ensconced since 1996 and was once referred to by Marion County Sheriff Frank Anderson as "our queen."
"I don't know that [the suit] would hurt him any worse than the political climate he's running in … . At this point, I don't see it being a political bombshell," Graham said.
Not that Dickerson seems to care, having defied political convention since tossing his hat in the ring early this year. He filed paperwork to get on last May's primary ballot without consulting the Republican party or going through the slating process. To great surprise in some circles, he beat the party's sanctioned candidate, Ron Franklin, a former City-County councilor.
Disputes with his bank could make Dickerson vulnerable only because he's campaigned on business issues.
Among them: making more money available to small business and bringing more government contracts home to the Rolls-Royce engine plant in Indianapolis. Dickerson once headed public relations and advertising at the plant under its former owner, General Motors, in the 1990s.
Back then, Dickerson was encouraged by Harry Pearce, who later became GM's No. 2 executive, to join a GM program that helped minorities own and operate dealerships.
In the late 1990s, Dickerson attended the National Automotive Dealer Academy in Virginia and spent two years training at Tom Wood Pontiac-GMCMazda, on the far-east side.
Dickerson's Buick dealership employs about 30 people, all of whom he hopes will find jobs at the half-dozen Ed Martin Automotive stores around the city. Dickerson's Buick dealership is to be folded into Martin's Pontiac-GMC store at 9896 N. Michigan Road.
Other minority car dealers in the region include Payton Wells, who operates a Chevrolet store at 1510 N. Meridian St.