Mahindra Class Action Gains Momentum, Dealers File Complaints at State Level

A lawsuit initiated by St. Louis-based would-be Mahindra pickup dealer Jerry Ackerman, has piqued the interest of 45 other expectant dealers seeking refunds and punitive damages from Indian automaker, Mahindra & Mahindra Ltd (Mahindra) and US importer, Global Vehicles USA (GV).  Additionally, another 70 dealers recently met in Atlanta to discuss joint legal action directly against Mahindra & Mahindra.

Class Action Claim

As we reported in April, Ackerman and Automotive Leasing Corp. filed a federal class action claim against both Mahindra and GV.  The claim states that despite Ackerman’s requests, both Mahindra and GV have refused to release the money paid for three Mahindra franchises.  The class action lawsuit is open to any entity that entered into at least one Dealer Sales and Services Agreement and paid money for the right to sell Mahindra products and accessories.  The suit seeks actual and punitive damages for breach of contract.

According to Automotive News (via Autoblog), around 45 (of around 350) other dealers have shown interest in joining Ackerman’s class action claim.

State Grievances

Another 70 dealers met in Atlanta (GV is headquartered in nearby Alpharetta) Georgia last month to discuss taking legal action directly against Mahindra.  Global Vehicles has not responded to email requesting response on the Ackerman claim, but Mahindra Planet is surmising that they are the organizers of the Atlanta meeting and are possibly encouraging the dealers to organize and seek legal action against Mahindra directly.

The 70 Mahindra franchisees, lead by New Hampshire car dealer Joseph Yergeau, intend to file complaints against Mahindra directly with their state motor vehicle law enforcement agencies.  These dealers feel that Mahindra and its failure to deliver its over-promised compact diesel pickups lies solely with Mahindra itself.  Yergeau says, “Our beef is with Mahindra, not Global.  Mahindra refuses to to talk to us.  But at some point they are going to have to deal with their dealers.”

A Third Action

Since Mahindra claimed that its distribution agreement with GV was null and void back in August of 2010, GV has focused on litigation and an arbitration process to come to an accord with Mahindra and satisfy the empty-handed dealer network they began developing in 2008.  After being forced to drop their federal lawsuit directly against Mahindra in February, GV has focused entirely on the arbitration set to begin in August of this year. 

According to Automotive News, some dealers have been contributing to a legal defense fund in support of GV’s arbitration efforts.  After an arbitration decision is rendered, GV will once again have the option of filing another federal lawsuit against Mahindra if they choose to do so.

Resolution

With three separate actions occurring simultaneously: 1) federal class action, Dealers v. Mahindra and GV; 2) Dealers v. Mahindra, via state law enforcement; 3) GV v. Mahindra arbitration, a clear outcome and conclusive arrangement may not emerge for quite some time.

As an anonymous dealer on a dealer’s forum put it:

“In a nutshell, for my investment to be worth a plug nickel, Mahindra needs to do one of three things: 1) Give an absolute confirmation, "Global's Dealers are Mahindra's dealers regardless of the outcome of the Arbitration; or, 2) Global needs to win the Arbitration; Or, 3) Mahindra needs to buy either a majority interest in Global's stock (thus we become Mahindra's dealers) or buy out Global's Assets including all the franchise agreements (thus we become Mahindra's dealers).

Clearly, there is little here we dealers have contol over!
You're right--What a Mess!”

Source: Automotive News, via Autoblog

Updated: GV Drops Lawsuit against Mahindra

Updated 24-Feb-2011: For the last few days the official North American Mahindra website operated by Global Vehicles USA, Inc. has been down.  When typing the url www.MahindraNA.com in your browser, an error is returned stating that the domain name does not exist.  Also note that the GV's corporate website, www.GV-USA.com is now "under construction". 

Mahindra posted an official statement on the dismissal of GV’s lawsuit last week. It confirms that the “arbitral tribunal in London issued an Award confirming that the tribunal has exclusive jurisdiction to resolve all disputes relating to Mahindra and Global Vehicles’ relationship, and it has directed Global Vehicles to stop all current litigation & not file any further litigation against Mahindra relating to the parties’ current dispute.”

Vehicle dealers and distributors are fairly well protected by US law from strong arm tactics or bullying by manufacturers under the Automobile Dealer’s Day in Court Act of 1956. By abandoning US litigation (at least for now), GV is kicking that blanket of protection off the bed. At this point, GV has consciously decided to commit all of their effort and confidence into the UK arbitration process.

Since a verdict isn’t expected until August of this year, expectant Mahindra fans have a long summer ahead to predict the results and debate what those results will mean for the way Mahindra vehicles will be distributed in the US. The good news is that this gives Mahindra time to perfect their products for an eventual US launch. The bad news is that established manufacturers appear to be on the brink of refreshing the small pickup market in the US.

As we have said many times before, the saga continues.

GV Drops Lawsuit Against Mahindra, Will Focus on Arbitration

Autoblog reports (via Automotive News) this morning that US Mahindra pickup distribution partner, Global Vehicles USA, Inc (GV) has withdrawn their US lawsuit against Mahindra & Mahindra Ltd over failure to provide TR20 and TR40 diesel-powered, compact pickups for US sales.

Apparently the lawsuit was dropped because the UK-based arbitration panel refused to rule on the case while an active lawsuit continues in the US. It remains to be seen how much more weight an arbitration ruling in favor of GV in the UK will carry over a win in US courts.

GV CEO, John Perez, is also claiming that the EPA data published last week does not reflect the 30 mpg figures that GV estimates the 2-wheel-drive TR20 pickups will achieve. It is unclear why the EPA only published data for the 4x4 TR40 pickup and not the supposed economy champ, 4x2 TR20. A 40% difference in fuel consumption between the two models seems like an incredible feat, but then it was GV who coordinated all of the US test vehicles and has first hand experience with Mahindra pickups on US roads.

Source: Autoblog

Breaking: Mahindra Kills Deal to Build Reva Electric Cars in US

A short while ago, Syracuse.com published then retracted a story providing details of US-based company, Bannon Automotive LLC, filing a lawsuit on Monday against Mahindra Reva Electric Vehicle Co. and it's parent company, Mahindra & Mahindra Ltd (M&M).

Bannon Automotive (of Long Island, NY) has been working directly with Reva, the state of New York, and Onondaga County since late 2009 to establish a vehicle assembly plant in the Syracuse, New York area.  The facility was to build US-market Reva electric cars from India-made parts kits, but it appears that those plans are on now hold indefinitely.

Reasons for the collapse of the Bannon/Reva deal read like a page straight out of Mahindra's dealings with their US truck importer and partner, Global Vehicles USA (GV).  In June, GV filed a lawsuit against M&M claiming that they were purposely delaying EPA certification efforts to prepare a compact diesel pickup truck for launch in the US market.  The lawsuit also asserted that Mahindra was effectively attempting to force an end to the exclusive import and distribution contract both companies had originally negotiated in 2006.  It has been widely speculated that Mahindra decided that they were no longer interested in using a US partner to distribute the pickups, and were attempting to negotiate directly with dealerships established by GV.

Bannon Automotive's lawsuit accuses Mahindra of breaking agreements to give Bannon an exclusive license to assemble and sell Reva cars in the United States.

From the Syracuse.com article:

"This material change in the representations made by Reva and Mahindra signaled the death of Bannon Automotive", Bannon said in the lawsuit filed in Nassau County, where Bannon is based.

"Unfortunately, Mahindra/Reva did not deliver as promised," Bannon Chief Fiscal Officer Jordan Levy told the Post-Standard (Syracuse.com) by email Wednesday.  "Accordingly, Bannon and its investors have been compelled to take legal action.  Bannon will continue try and follow through with the project as planned.  We remain committed to bringing an affordable, US manufactured electric vehicle to the American marketplace."

The lawsuit seeks to force Reva to give Bannon a license to make the Reva vehicle for the US market and to bar Reva from granting a license to anyone other than Bannon to manufacture and market Reva cars in the United States.

Apparently Mahindra has been using the same playbook to coordinate their strategies with Bannon and GV.  Bannon goes on to state that Mahindra had repeatedly delayed signing a definitive licensing agreement after their majority stake takeover of Reva in May.  Bannon claims that Mahindra told them via email in August that they would not have a vehicle ready for them to sell in the US.  Bannon claims that the August email was the last communication they have received from Mahindra.

Mahindra Planet will continue to follow the story.  Please go to Syracuse.com for more.
Updated 7:15AM 23-Dec-2010: The Syracuse.com link is now live again: Electric Car Project for Onondaga County Collapses

Source: http://www.syracuse.com/

Mahindra Rejects $35 Million GV Pickup Order

A press release this morning indicates that Mahindra & Mahindra Ltd has rejected a USD $35 million order for the Indian made Mahindra compact diesel pickup trucks placed by its US importer and business partner, Global Vehicles USA.


The release goes on to state:

“Mahindra views this order as another example of Global Vehicles' policy of engaging in PR theatrics while pursuing an unnecessary lawsuit. This is Global Vehicles' continued attempt to manipulate the press to damage Mahindra's reputation. Mahindra also believes that this is an attempt by Global Vehicles to distract Mahindra from pursuing other plans to bring its vehicle to the US market.”

To read the entire press release, click here: Mahindra Rejects any attempt by Global Vehicles to order Mahindra vehicles as it is Invalid

Source: Mahindra