In Dealer Termination Case, the Gun Incident Didn't Help

Subaru of America Inc. won a key round in its battle to get rid of one of its oldest and most profitable dealerships, Forty-Niner Subaru in Angels Camp, CA.

The California New Motor Vehicle Board unanimously upheld Subaru's termination notice against the store. Owner Richard E. Wilmshurst has tangled off and on with the importer's representatives — including an incident involving a gun — ever since getting a Subaru franchise in 1981.

Subaru's complaint cites the “horrible” condition of the dealership, which was built in 1961 as a Chevrolet store in an historic mountain town in north-central California.

The auto maker also accuses Wilmshurst of engaging in heated arguments with Subaru representatives during their visits.

Yet, despite the fact that Forty-Niner consists of two buildings — one without a rest room, notes Subaru — on opposite sides of Main Street, it is a high-selling and high-profit store.

Subaru legal documents indicate Forty-Niner's sales in its so-called “area of responsibility (AOR) fell from 140 in 2005 to 123 in 2006 and to 34 in the first quarter of 2007.

Forty-Niner's AOR sales were slightly higher in these three periods than other Subaru stores combined, but the importer maintained “that a well-performing dealership should dominate sales within its AOR.”

The store lacks a covered indoor showroom and Wilmshurst has resisted Subaru's demands for upgrades and repairs.

Subaru says he is far from financially strapped, claiming Forty-Niner's cash on hand is about $1 million. There is no mortgage nor long-term debt. Wilmshurst operates without floor-planning loans, paying for his inventory in full.

Adding to the controversy surrounding Wilmshurst — a member of a family that entered the auto-franchise business in Angels Camp with Chevrolet in 1933 — are incidents of rancor between him and Subaru representatives.

Jerry Van Wechel, Subaru's regional market development manager, testified before an administrative law judge that during a routine visit to the store in 2000, Wilmshurst set a handgun on his desk.

In response, Wilmshurst testified he “never shot at anyone, physically harmed anyone, or threatened to shoot anyone.”

Subaru also claims Wilmshurst in May used dealership funds for his personal benefit, unrelated to dealership needs. Wilmshurst admitted doing so, explaining he used the money for bail after he was arrested for assaulting a police officer.

During a 4-day hearing, Wilmshurst, acting as his own attorney, accused Subaru witnesses of lying. The board said his “diatribe” diminished his credibility and his “version of events.”

Wilmshurst, 72, plans an appeal.

“Forty-Niner Subaru has a 100% customer satisfaction rating,” Wilmshurst tells Ward's in a phone interview. “I am convinced Subaru's attorneys arranged for Subaru officials to lie about me.”

He says the termination notice is in retaliation for his suing Subaru for $400,000 damages for warranty cost underpayments. Subaru was upheld in that case.

“Unfortunately,” he says, “the board's attorneys and public members too frequently take the side of the auto maker attorneys.”