GM terminates contract with Anoka's Main Motors

For Lee and Karen Carlson, owners of Main Motors in Anoka, the numbers don't add up: The family has owned the business for 90 years. The dealership exceeded recent objectives. And its positive turnaround in 2009 sales ranks seventh among Twin Cities General Motors dealers.

Yet Main Motors' GM dealership contract has been terminated. But the Carlsons, angered and stunned by GM's decision, vow that Main Motors will be in business after their relationship with GM officially ends Oct. 31, 2010.

"We're not done fighting them yet," Karen Carlson said.

"We have a very good body shop, a wonderful service and parts department, and we do well in used car sales," Lee Carlson said. "We're going to continue operating."

The Carlsons say they received more than 800 hits on the Main Motors website after their contract termination became public. Main Motors gained national attention last week, thanks to a crusade by Fox News morning host Gretchen Carlson, Lee and Karen's daughter, who challenged on television the reasoning for shutting down her family's dealership.

"I'd like to get hold of the car czar," Gretchen Carlson said on Glenn Beck's show. She said on TV that her parents' dealership was profitable, that they "lay awake at night worrying" about the fate of their business, and said that survival in the auto business may be about "who you know and who you can speak to."

Changes in strategy

When Lee Carlson, 75, came out of "semi-retirement" 13 months ago to try to reverse local sales trends that have staggered the auto industry nationally, he said his plan was to change sales, ordering and advertising philosophies.

"We felt we made an impact," he said.

Main Motors actually reached 105 percent of its objectives, Karen Carlson said.

"How can you do much better than that with this economy?" she asked.

While GM sales are down 40 percent from last year's period of January through May, Main Motors' sales were down only 14 percent over the same five-month period, Karen Carlson said. Through May, only two Twin Cities GM dealers were ahead of last year's percentage of sales for the first five months of the calendar year, according to an industry report. And only six metro dealerships ranked above Main Motors in percentage change of sales for the same periods. Forty-eight dealerships in the metro region trailed Main Motors, according to local industry reports.

GM doesn't "seem to care," Karen Carlson said.

Main Motors avoided the initial wave of franchise terminations. But the Carlsons received a letter of termination June 2 -- the day after GM filed for bankruptcy. The Carlsons said they appealed GM's decision based on Main Motors' recent turnaround, but it was denied.

With the threat of GM revoking warranties on Main Motors stock and the gun-to-the-head urgency of otherwise having to "dispose of $4 million of inventory in days," Lee Carlson said he reluctantly signed and returned the letter before last Friday's GM-imposed deadline.

The Carlsons, whose sons, William and Mark, own Carlson Toyota in Coon Rapids, have had family members in the car business since Lee's father, LeRoy Carlson, and uncle, Bert Swanson, bought a Dodge dealership in Anoka. It was a Chevrolet dealership when it opened in 1919.

Lee Carlson has been sole owner of the dealership on Main Street in Anoka for three decades. He's been in the car business since he began pumping gas when he was 12.

"In our 90 years of business, we've seen the Great Depression, been through wars, survived the 21 percent interest rates of the 1980s," Lee Carlson said. "We've weathered every storm but this one.

"We have three consecutive periods in which our numbers go up. And then one day it's gone?"

The dark clouds seemed a million freeway miles away in Main Motors' bright showroom last week. "You walk through the building, and you see customers you recognize, people whose families have come here for years," Karen Carlson said.

"You know, when we got the termination notice, it was from 'General Motors.' There wasn't even a name attached to this. It was so cold. The shame of it all is, you walk downstairs and see our staff with our customers, and it's so warm in here."

Paul Levy • 612-673-4419