Hecker shuts Stillwater Cadillac, owes workers

After two weeks of intense scrutiny by inventory financier GMAC, Denny Hecker shut his Stillwater Cadillac Pontiac GMC dealership Monday morning and reportedly is considering selling his Southview Chevrolet dealership in Inver Grove Heights.

Entrances to the Cadillac dealership were blocked and doors were locked early Monday, two weeks after GMAC officials parked themselves inside to run audits and secure the keys of all the vehicles. Employees said that GMAC officials were so intent on guarding their inventory that they even followed some salesmen during customer test drives.

Hecker managers called workers about 10 Sunday night to tell them to come to the dealership to pack up their desks.

Hecker now has closed 18 of his 26 dealerships over the last few months, a process Chrysler Financial triggered by cutting off his funding for most of them. Chrysler Financial is suing Hecker for $550 million in loans that allegedly are in default.

Workers at Southview Chevrolet say they fear their dealership will be next. GMAC provided the floor-plan financing for the Chevy dealership and for the purchase of some Toyota vehicles.

GMAC officials declined to comment specifically about Hecker. GMAC spokesman Michael Stoller said that GMAC cannot order any dealer to close. It can, however, call a loan due or freeze financing. Several area car dealers said that if GMAC demands payment for all outstanding loans, it could prompt Hecker to close more dealerships.

Barb Jerich, president of Hecker Automotive Group, said last week that she expected the remaining Hecker dealerships to remain open. Hecker officials had little comment about the situation today.

Union officials and employees complained that some dealership workers have not been paid since March 14, which management blamed on severe cash-flow problems. Employee health insurance policies were allowed to lapse for several days last week.

A worker who asked not to be identified for fear of retribution said the pay issue remains a sore spot.

"When the checks didn't come on Friday, some of the salespeople [at Stillwater Cadillac] took all their stuff from their desks and went home," he said. On Saturday, he said, only two of about a dozen salespeople showed up for work.

The worker said he's owed several thousand dollars, while some salespeople are owed as much as $10,000 in unpaid commissions. "As for me, I can't pay my mortgage and I can't get my prescriptions filled until I get paid," the employee said. "It doesn't make much sense to go there to work if we do not get paid."

Two workers said managers announced last week that if they felt they must leave and file for unemployment insurance, the company wouldn't contest the claims. Company officials, however, said the managers don't have authority to make such promises.

Rick Ryan heads the local office of the International Association of Machinists and Aerospace Workers, which represents Hecker's auto mechanics and service workers in the St. Paul area.

"Our guys didn't get paid Friday or Saturday and none of the people who were laid off at the other [Hecker] dealerships ever got their vacation money," Ryan said. "It's a bad situation."

The union represents 45 people at Southview Chevrolet and at Hecker's Inver Grove Heights Toyota dealership. "I don't know what our people are going to do," Ryan said, noting that GMAC is tightening credit across the country.

"Do we picket? Then what? Do you walk off the job? And go where? There are no jobs out there. So you are stuck with Hecker. But you can't keep showing up for work if they are not going to pay you," Ryan said.

Employees said GMAC officials took possession of the car keys at Southview Chevrolet and at Stillwater Cadillac two weeks ago to protect the inventory it helped finance. GMAC has been requiring that customers pay with cash or certified checks for all autos, a practice that reportedly has hampered sales.

Hecker employees say there's too little cash on hand to pay for customer trade-ins or manufacturers' rebates. GMAC typically requires full payment from dealers for sold vehicles that it helped finance. Dealerships typically must wait to get reimbursed on manufacturer rebates.

"Everything is under lockdown with GMAC," said one Hecker employee. "They even follow the salespeople on demo drives to make sure the car is coming back. They are putting on the clampdown, big time."

Dee DePass • 612-673-7725