Tuesday, December 24, 1996
GM says Schott hiding cars
Sales allegedly faked to meet quota

BY GEOFF HOBSON
The Cincinnati Enquirer

General Motors has accused embattled Reds owner Marge Schott of hiding cars at her Indian Hill estate in an ''elaborate scheme'' to boost sales at her troubled Chevrolet-Geo dealership, The Enquirer has learned.

Mrs. Schott ''simply fabricated 'purchasers' that never bought a vehicle,'' GM said in a document filed Dec. 4 with the State of Ohio Motor Vehicle Dealers Board.

GM alleges that Mrs. Schott falsified 57 retail sales last year in reports to the car company in order to satisfy quotas that would allow her to keep her franchise.

That would violate their 1995 agreement, when GM told Mrs. Schott her business wasn't meeting GM sales standards and established the quotas, and the allegations set in motion a procedure that could culminate as early as next month with the state taking the dealership away from Mrs. Schott.

Major League Baseball was reportedly also interested in the GM case in an effort to see whether Mrs. Schott involved Reds employees. Two sources told The Enquirer Monday some Reds employees received notifications from GM of purchases or leases that they didn't make.

Major League Baseball, whose offices are closed this week for the holidays, suspended Mrs. Schott June 12 from running the Reds on a day-to-day basis because of her conduct, including comments she made about Adolf Hitler, Asian-Americans and working women.

Mrs. Schott, who had two weeks to respond to GM's protest, has the next move, which will probably come after the holidays.

This is the fourth attempt by GM to end its relationship with Mrs. Schott's Chevrolet-Geo franchise in Montgomery. GM made an attempt in 1988 to take away her Buick franchise in Norwood.

Lawyers for GM and Mrs. Schott refused to comment Monday. Contacted late Monday, Mrs. Schott said, ''I don't know anything about it.''

David Cooke, the state's assistant chief of public information for public safety, said the board continues to look into the matter.

The state dealer licensing board is an administrative body that arbitrates disputes between carmakers and dealers, and licenses dealers. The state has the power to revoke dealership licenses.

In the document, GM says it confronted Mrs. Schott with the results of its audit, and she ''did not dispute or respond to any of those findings. Instead, Mrs. Schott indicated she understood the results of the audit and commented only that such sales were 'involved in a lawsuit situation with General Motors.'Ç''

In June 1995, Mrs. Schott reached a settlement with GM in which Marge Schott Chevrolet-Geo agreed to hit retail sales quotas during any two of the final three calendar quarters in 1995 or the first two quarters of 1996.

Failure to meet the goals would void GM's agreement with Mrs. Schott.

Bleak picture

GM says when the falsified sales were excluded, Mrs. Schott fell short.

According to the document, the dealership had to make 160 retail sales to hit the quota for the third quarter of 1995. Only 129 vehicles were sold. In the last quarter of '95, the goal was 165 with actual sales 83. In the first quarter of '96, the goal was 186, but just 117 were sold. In the second quarter of '96, there were only 89 sales when 217 were required.

GM says Mrs. Schott earned $19,397 in dealer incentives because of the false sales.

One of GM's affidavits is dated Aug. 30, 1996, from ''A Dealer Who Tries to Play It Straight'':

''A salesman who formerly worked for Marge Schott and now works for me told me she fabricated the sale of some 50 cars at the end of September 1995 to meet a quota that would enable her to keep her franchise.''

Four-day audit

According to the document, GM conducted a four-day audit and then confronted Mrs. Schott's general manager, Mel Lehrner. The document says he ''conceded'' that the 57 sales were fabricated and that both Mr. Lehrner and the comptroller advised her not to misrepresent sales, but that Mrs. Schott told them to do so. Mr. Lehrner then instructed all files be turned over to GM.

Mr. Lehrner, now working at Terry Lee Chevrolet-Geo Inc., told The Enquirer Monday: ''You don't need me on this one. It's all been documented. I have no comment.''

GM says Mrs. Schott used the names of acquaintances, friends and dealership personnel as ''fictitious purchasers.''

GM said in order to avoid detection, Mrs. Schott moved the vehicles reported as ''sold'' from the dealership. She then sold the vehicles months, ''and in some cases nearly a year later, many of which were sold at auctions.''

Leah Beth Ward contributed to this story.