APPLYING BRAKES TO RIVAL; HONDA SUES TO PROTECT DEALERSHIPS.Byline: Gregory J. Wilcox Daily News Staff Writer Moving to protect its turf, American Honda Motor Co. sued Republic Industries Inc. to block that company's aggressive shopping spree for Honda and Acura dealerships. Honda's U.S. unit filed the suit late Tuesday in U.S. District Court in Los Angeles Los Angeles (lôs ăn`jələs, lŏs, ăn`jəlēz'), city (1990 pop. 3,485,398), seat of Los Angeles co., S Calif.; inc. 1850. after negotiations with Ft. Lauderdale, Fla.-based Republic collapsed. Republic is refusing to abide by To stand to; to adhere; to maintain. See also: Abide Honda's policies for dealership ownership, the suit claims. Republic, under the guidance of billionaire Chairman Wayne Huizenga Harry Wayne Huizenga (born on December 29, 1937 in Evergreen Park, Illinois) is an American businessman who has built several companies into multi-billion dollar enterprises, mostly through an aggressive process of acquisitions. , owner of several Florida sports franchises, including the Miami Dolphins professional football team, has blitzed blitzed adj. Slang Drunk or intoxicated. the new-car market during the past year. The company, which also operates the AutoNation used-car super-stores, has spent more than $1 billion on 104 new-car dealerships, making it the country's largest auto retailer. Last January, Republic paid $20.9 million for Valencia's Magic Ford and Magic Lincoln-Mercury at a bankruptcy sale. On Monday, Republic announced it will purchase de la Cruz de la Cruz is a common surname in the Spanish language meaning 'of The Cross.'
The company's new-car sales now top $5 billion annually. But Honda hopes to slow what has become a retailing juggernaut Juggernaut, India: see Puri. Juggernaut (Jagannath) huge idol of Krishna drawn through streets annually, occasionally rolling over devotees. [Hindu Rel.: EB, V: 499] See : Destruction . The Japanese automaker limits the number of dealerships that can be owned by a single company or individual; 10 overall, including no more than seven Honda dealerships. Also dealer ownership by public companies like Republic is limited to a less than 50 percent stake in each store. ``We are not going to sit back and allow Republic Industries to exploit our 27 years of relationship building with our customers and our dealers, and erode Erode (ĕrōd`), city (1991 urban agglomeration pop. 361,755), Tamil Nadu state, S India, on the Kaveri River. The city is located in a cotton-growing region, and its industries include cotton ginning and the manufacture of transport equipment. the equity in the Honda and Acura brands,'' said Richard E. Colliver, the Honda Division senior vice president for automobile sales. Republic issued a conciliatory con·cil·i·ate v. con·cil·i·at·ed, con·cil·i·at·ing, con·cil·i·ates v.tr. 1. To overcome the distrust or animosity of; appease. 2. response to the suit but made it clear it will not be pushed off course by the suit. ``We would value a profitable relationship with Honda and we are going to work hard to bring that about. And when this passes we hope that can happen,'' said Jim Donahue, a Republic vice president. ``But Republic finds Honda's action surprising and entirely without merit and intends to defend its position vigorously.'' Honda is also worried that Republic's stated plan to buy more than 60 Honda and Acura dealerships over the next 18 months could give it nearly 20 percent of American Honda's sales volume. Honda says that is unacceptable. ``They have definitely gone on record saying that they are looking to acquire roughly 5 percent of our dealers and they are looking at the top dealers,'' said Honda spokesman Mike Spencer. ``We feel its not in our best interest to have dealerships monopolized under the owner of one individual.'' Donahue, though, said Republic ultimately would have only a ``low, single-digit percent'' of Honda's sales. The suit is the second recent attempt to beat back Republic's advances in the new-car market. Early last month, Toyota Motor Corp. said it would oppose Republic's attempts to buy Toyota dealers in Texas and Arizona. Analyst Robert Friedman at S&P Equity Group said Republic is now traveling some rough road. ``Their strategy is riskier than initially thought. This could give other automakers pause for thought about relinquishing re·lin·quish tr.v. re·lin·quished, re·lin·quish·ing, re·lin·quish·es 1. To retire from; give up or abandon. 2. To put aside or desist from (something practiced, professed, or intended). 3. large amounts of their dealerships to the Republic network,'' he said. REPUBLIC INDUSTRIES INC. Headquarters: Ft. Lauderdale, Fla. Business lines: Republic is a diversified diversified (di·verˑ·s holding company with subsidiaries in solid-waste services, electronic security services Security services are state institutions for the provision of intelligence, primarily of a strategic nature, but also including protective security intelligence. Examples include the Security Service (MI5) and the Secret Intelligence Service (MI6) in the United Kingdom, and the , car rentals and sales. Auto operations: 104 new-car stores and 11 AutoNation used-car super-stores. A 12th will open Friday in Florida and one is under construction in Irvine in Orange County. Southern California Southern California, also colloquially known as SoCal, is the southern portion of the U.S. state of California. Centered on the cities of Los Angeles and San Diego, Southern California is home to nearly 24 million people and is the nation's second most populated region, operations: Company owns Magic Ford and Magic Lincoln-Mercury in Valencia and Champion Chevrolet in Orange County. CAPTION(S): Photo, Box Photo: (Color) Honda's American unit sued Republic Industries Inc., owner of Valencia's Magic Ford, to bar purchase of its car lots. Shaun Dyer/Special to the Daily News Box: REPUBLIC INDUSTRIES (See Text) |
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