U.S. News: ACDelco Comes Under Fire For Distribution Program

A large ACDelco parts distributor in the northeastern U.S. has been successful in its bid to gain a preliminary injunction preventing General Motors from imposing its Dedicated Distribution Program.
The program, which has not been instituted in Canada, targets large ACDelco distributors as exclusive sources of supply of ACDelco parts and gives them dedicated territories.
The distributor involved in the injunction, Stevens Beil, is the second largest ACDelco parts distributor in the Northeastern United States, announced that the preliminary injunction enjoins General Motors Corporation from terminating its relationship with Beil or from imposing any territorial restrictions on Beil’s sales pursuant to General Motors’ recently announced Dedicated Distribution Program for ACDelco parts.
The court’s decision, issued by the Honorable Stephen M. Orlofsky, held that Beil would ultimately likely succeed in its claims that the General Motors’ program, as applied to Beil, violated the New Jersey Franchise Practices Act.
General Motors implemented the new program for distribution of ACDelco parts in the U.S. last August. Under the program General Motors sought to restrict Beil, which markets parts in at least 11 states, to selling parts only in the Philadelphia Metropolitan area. The court determined that Beil would likely be able to prove that General Motor had imposed unreasonable standards of performance on Beil by seeking to have Beil operate at a substantial loss while General Motors implemented an “unfounded business strategy.”
The Court rejected General Motors’ projection of the new business Beil would purportedly attract under the new program. It found that implementation of the program would irreparably harm Beil’s business.
“I’ve sold ACDelco products for forty years, and filed suit to protect our employees foremost, our customers and to preserve my life’s work,” said Steve Beil, the CEO of Stevens Beil.