Reviva sues Ford to stop agreement termination

Article by: LIZ FEDOR , Star Tribune
Updated: November 25, 2009 - 8:22 PM

The carmaker is trying to shrink the number of authorized distributors.

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Minneapolis-based Reviva, a third-generation distributor of Ford parts, sued Ford Motor Co. in U.S. District Court on Tuesday in an attempt to block the automaker from terminating its agreement with Reviva.

From facilities in Minneapolis, Milwaukee and Detroit, Reviva distributes engines, transmissions and other parts to Ford, Lincoln, Mercury and Ford heavy truck dealers in a five-state area.

In a court complaint filed in St. Paul, Reviva said that it has been operating profitably and had Ford's support a year ago to buy out a competing distributor to take control of the Michigan market.

Yet Reviva said Ford now intends to sever its relationship with Reviva because of the company's strategy to shrink the number of Ford authorized distributors in the United States.

Reviva has asked the court to prohibit the agreement termination based on multiple legal arguments.

Ford spokeswoman Marcey Evans said Wednesday that the company has not received a copy of the lawsuit yet, and couldn't comment.

Reviva, which got its start in St. Paul as a small engine rebuilder in 1944 in the garage of a Ford dealership, changed its name from Dealers Manufacturing Co. in 2002. It acquired Engine Rebuilders Inc. of Oakes, N.D., in 2007.

Under Minnesota law, Reviva argued, Ford cannot terminate its agreement unless it meets three conditions: shows good cause, provides advance written notice of alleged performance deficiencies and gives the targeted business an opportunity to "cure" the problems.

In its court filing, Reviva said it doesn't have performance problems and Ford lacks the legal basis to cut ties with Reviva.

Liz Fedor • 612-673-7709