Suits say dealers shaved discounts


Free Press Staff Writer

Longtime Chrysler employee Bill Stidham thought he was getting a good deal when he bought his new Dodge Ram pickup.

Like thousands of auto company workers and retirees, Stidham was entitled to a big employee discount on his truck. So, as a 32-year Chrysler employee, he believed buying the truck should have been a simple transaction: Go to a Chrysler or Dodge dealer and pay a set price- no haggling, no numbers games, no reason to fear getting a bad deal.

“It all seemed pretty straightforward,” said Stidham, 55, of Troy.

But a few months ago-about a year after taking his truck home- Stidham got a call from the salesman who cut the deal.

“I told him, ‘You were done wrong,’” said Tom Hayes, the 31 year-old salesman who had been fired by Sterling Heights Dodge in January after working at the dealership for about eight months.

Hayes later showed Stidham using paperwork from the deal, that he had gotten his employee discount but had paid about $1,700 more than he thought he was paying for dealer installed options.

“I got cheated and I want to get it straightened out,” said Stidharm, the lead plaintiff in a class action lawsuit filed this month on behalf of Chrysler employees against Sterling Heights Dodge and another dealership.

Stidham drives a Chrysler parts truck every day from Detroit to Dayton, Ohio. “I’ll never cross the door of that place again.”

In a lawsuit filed in April against Sterling Heights Dodge in Macomb County Circuit Court and in interviews, Hayes alleges that the dealership regularly misled Chrysler employees into paying inflated prices, forging customer signatures and charging customers for warranties they hadn’t agreed to.

Hayes said he was fired because he threatened to alert regulators to what he said was the dealer’s deceptive practices. His bosses told him he was dismissed for losing his auto insurance, he said.

Hayes’ allegations echo those made in another wrongful discharge lawsuit that Anthony Camarda, a former salesman at Meadowbrook Dodge in Rochester Hills, filed in February in Oakland County Circuit Court. He also claims he was fired after threatening to reveal deceptive practices to regulators.

The Michigan Secretary of State’s Bureau of Automotive Regulation is investigating both dealerships, Jim Hunsucker, director of the agency’s dealer division, said Thursday.

In court papers, Sterling Heights Dodge and Meadowbrook Dodge deny the salesmen’s claims. Meadowbrook Dodge has files a counterclaim against Camarda, accusing him of slandering the dealership.

Both dealerships are run by members of the same family. Anthony Viviano, general manager of Sterling Heights Dodge, did not respond to requests for an interview. Nor did Salvadore Viviano, general manager of Meadowbrook Dodge, and Mary Viviano, the dealership’s office manager.

This month, both dealerships became targets of a class action lawsuit filed on behalf of Stidham and what’ his lawyer says are potentially hundreds of other Chrysler employees who may have been overcharged thousands of dollars on dealer -installed options and misled into believing they received their employee discount-when they didn’t.

“Does Chrysler really have to come out and say don’t steal from our employees?” asked Steve Lehto, the Farmington Hills attorney, who filed the class action lawsuit on Dec. 13 in Oakland County Circuit Court.

Lehto said he is urging all Chrysler employees who bought vehicles at the two dealerships in the past six years to take a second look at their deals.

Chrysler ,spokesman Mike McKesson said the company is aware of the lawsuits but had no comment because the corporation is not a defendant. Dealerships are paid a fee by Chrysler Corp. for processing employee vehicle purchases but generally don’t make as much money on the deals as they do by selling to the public.

Dealers are not required to participate in the employee purchase program. Chrysler has not had complaints from employees about the employee purchase program at any dealerships, McKesson said.

That’s because employees don’t know when they are being overcharged, said Stidham, both sales men and their attorneys. In many cases, Chrysler employees were never given key documents that would alert them they were paying more than they should with their discount, they said.

“Many times employees and retirees are paying more than you or I do walking in off the street,” said Elmer Roller, the Detroit attorney representing Hayes and Camarda. “They get blindsided. They are trusting and they have an expectation that they don’t have to do the math.”

The most important document is what Chrysler workers commonly call “the green sheet”-the company-issued “Employee/Retiree New Vehicle Purchase/Lease Agreement.” On the front page of the form is a worksheet that shows how the employee price was calculated- and discloses what the employee is being charged for dealer-installed options. Dealerships are required to give employees a copy of this form, but Hayes said his clients seldom got a copy.

Because Chrysler employees trust the dealership, Hayes said, they regularly signed blank documents and rarely read others that were filled out. Hayes said that he and other salesmen at Sterling Heights Dodge were trained to put their hand over parts of documents to hide numbers that might tip off a buyer that the accessories they had been led to believe cost $300 were actually costing them $1,500 or more.

How the program works

Chrysler employees retiree’ and eligible family members are entitled to buy a Chrysler, Plymouth, Dodge or Jeep/Eagle vehicle for the factory invoice price, minus dealer holdback, marketing and advertising costs.

Depending on the vehicle, the employee purchase price is generally about $2,000 below invoice.

While this is supposed to be a set price, employees still must make sure they are getting the discounts owed to them. The purchaser is solely responsible for making sure that he or she receives the employee discount Chrysler gives these instructions:

* Before going to a participating dealership, employees or retirees and eligible family members should obtain an employee purchase instruction guide and a “green sheet” purchase agreement form from Chrysler.

* These documents tell the purchasers that they are entitled to see a copy of the dealer’s factory invoice for the vehicle and that the employee price is listed on the invoice immediately following the “EP” code.

* The instructions tell the purchaser that the “computation of employee price” section of the employee purchase agreement when the vehicle is delivered

* The dealer is required to give the purchaser a completed and signed copy of the employee purchase agreement when the vehicle is delivered.

* While the purchase price of the vehicle is set by a formula, any dealer-installed options such as fabric protection or a sunroof the employee wants to buy are subject to haggling.

Car-buying tips

* Ask to see the original dealer invoice-not a copy, which could have been altered. Make sure you understand what the charges are.

* Be cautious when negotiating for dealer-installed options. If a sales person says he or she will throw in fabric protection, that doesn’t necessarily mean its being thrown in for free

* Get a detailed breakdown in writing of all vehicle costs, especially dealer installed options, such as fabric protection, a CD player or special trim.

* Keep track of how many documents the dealership has you sign and make sure you are given a copy of each. Pay close attention to a form from the Michigan Secretary of State’s Office, called RD108. This required form for a new vehicle purchase has a section that breaks. out dealer-install options and their “value amount which is the price you are being charged. Make sure this amount is the amount you agreed upon.

How to complain

The Michigan Secretary State’s Bureau of Automotive Regulation licenses and regulates dealers. Call 1-800 292-4204, 8 a.m. to 4:30 p.m. weekdays.

© Detroit Free Press, 12-27-96.