A Minneapolis Business Journal Reporter called me the other day to tell me Twins catcher Joe Mauer had just bought the land on which Denny Hecker’s Southview Chevrolet (now closed) sits. Once his story printed, Mauer’s brother Bill called the reporter to say he had bought the land, not his brother Joe.

The source for the story was the Mauers’ grandfather who claimed Joe was setting Bill (who had been a sales manager at Southview) up with the dealership. Bill declined to say how he paid for the land.

To read story, click: Joe Mauer buys auto lot formerly run by Hecker.

Bill (or Joe) Mauer reportedly is trying to get the rights to the GM franchise, but the auto maker is blocking the plate, so to speak, in true Mauer fashion. For the record, Joe Mauer grew up in the Minneapolis region and is the best catcher in Major League Baseball today, and potentially will be the best catcher in the history of the game once he retires. In other words, he’s a Minneapolis icon.

A couple of years ago, this would have been a no-brainer for GM. But now, the world is much different. Unfortunately for Mauer, this is one hit he likely won’t get.

GM is in the process of eliminating about 1,300 dealerships (not counting Saturn, Saab and Hummer). Anyone getting a GM franchise today is going to have to have a proven track record of running a dealership.

For Bill, being a sales manager in the Southview dealership actually could be a strike against him. It was part of Denny Hecker’s empire which suffered a specatular collapse late last year. In fact, a grand jury right now is deliberating whether to bring charges against Hecker. He allegedly has defaulted on approximately more than a billion dollars in loans along with having a DUI in the last 12 months.

In other words, working for Hecker is not something to put on the resume when trying to get a dealership.

Another issue is that athletes in recent years have a had a poor track record owning dealerships. Several years ago, Mel Farr, a former Detroit Lion and Ford favorite, watched his automotive empire collapse. He targeted the subprime market, a tough one to succeed in.

In February, former Houston Oilers defensive lineman Ray Childress shut down his 40-acre auto mall in Texas while New Orleans Saints running back Deuce McAllister closed his Jackson, MS, Nissan dealership in March after filing bankruptcy.

Michael Jordan’s Lincoln Mercury store in North Carolina also closed earlier this year although, his Nissan dealership still is going strong.

One group of athletes that have done well in the auto business are race car drivers. Roger Penske has the second largest dealer group in the world while Rick Hendrick, owner of Hendrick Motorsports, owns more than 60 dealerships across the country. There are several others.

For now, it looks like Mauer will end up owning an expensive used-car lot.

Is the government’s program proving to be too popular? Sales at many dealerships are going through the roof with many reporting selling more than a hundred vehicles in the program’s first few days.

Dealers essentially are having to front the cash for the $3,500 - $4,500 vouchers and probably won’t receive reimbursement money from the government for several days. The government has 10 days from the time deals are approved to electronically submit money from cash-for-clunkers into dealer accounts.

The problem is, dealers have to scan, create PDFs and electronically submit at least 20 documents for each deal for the National Highway Traffic Safety Admin. to approve it. Many dealers are reporting deals are being rejected for incomplete or incorrect information. The rules published by NHTSA last week consist of a 135 page document and filled with legalese, so mistakes and misunderstandings are bound to happen.

Another problem is that dealers often are unable to log onto the government website to submit the paperwork.

In other words, dealers may be waiting a while for the money — and with so many dealers having cash flow and credit issues today they’ll have to be careful they don’t clunk themselves out of business.

Nonetheless, the incentive is a big hit and inventory is flying off dealers’ lots, so dealers are willing to put up with some frustration.

A recent story in one of the consumer magazines asked whether the industry still needs dealers. It argued auto makers could sell cars just fine using the Internet. Haven’t we been down this path before?

Prevalent throughout the article was the premise that dealers are why cars aren’t selling. Specifically, the reason for the decline in sales is because customers are frustrated with the car-buying process.

It’s been a common theme recently. Sales are down so it must mean dealers are bad. Auto makers also have fed that line of thinking by eliminating “poor performing” dealers while implying they need to fix their retail networks.

Even vendors and consultants who sell to dealers are getting caught up in the hype of “blame the dealer.” Just visit one of the automotive conferences and you’ll hear how dealers need to fix their businesses.

The dealer is why we’re only going to hit 10 million sales this year? Nothing could be further from the truth. The banks are at fault, not the dealer. The reason cars aren’t selling is because of the continuing unavailability of credit. The industry was fine until the credit markets collapsed last year.

Dealers have to work harder to get deals financed. Banks say they have loosened the tough credit guidelines. That may be true, but they still are financing far fewer non-and subprime deals. Add to that, the average credit score on new-vehicle purchases continues to climb, according to Experian Automotive.

Dealers are keeping the industry afloat but it’s going to take the banks to bring to the industry back to levels much less painful then they are today. I’m not saying the banks are evil. The fact is, they are between the proverbial rock and a hard place. They got hammered for making bad loans when lending money to people who were high credit risks. And now, we’re hammering them for not continuing that practice.

However, the banks need to loosen up a bit, dealers tell me. Credit unions are trying to fill the gap, but there is only so much they can do because their portfolios and resources are far more limited than what large banks have.

Are there areas in which dealers can improve? Absolutely. The future represents a great opportunity for the 18,000 dealers that will still be in business next year.

Now is the time to “seize the moment,” to get the right staff and the right processes in place for when traffic returns. I have conversations daily with dealers who are doing just that.

In the next couple of weeks, the Cash-for-Clunkers program will be in full force. It’s going to drive a lot of traffic to dealerships who already are marketing themselves as Cash for Clunkers businesses.

If you’re not already getting your dealership ready — marketing, sales people, service advisors — get started today, otherwise you risk being marginalized in your market.

Dealers already are ramping up designing marketing and incentive programs to capitalize on the program the next few months. Dealers are going to be the ones who make the program work.

So hang on. The rest of the year could be exciting.

Following a five-hour meeting on Friday and numerous email exchanges over the weekend with NADA officials and members of its national dealer council, General Motors is amending the new — and stringent — franchise agreements it mailed to surviving dealers last week. (NADA Approves GM’s Modified Dealer Participation Pact).

The meeting went so long, members of GM’s contingency, including executives Troy Clarke and Mark LaNeve, had to reschedule their flights back to Detroit.

You can read my column on the danger these contracts pose to the automotive retail system here.

GM is overnighting its clarifications and amendments to its dealers today. Dealers now have until Monday June 15 to sign and return the agreements (extended from Friday June 12).

The amendments, or clarifications, for the most part, soften language found in the agreements mailed last week.

NADA also is sending a letter to its GM dealer members outlining the auto maker’s clarifications.

Regarding the more demanding sales requirements, NADA’s letter says GM will hold a Reinvention Business Plan with its continuing dealers in the first quarter of next year “where ‘appropriate’ sales targets will be agreed upon.” The new requirements will take effect in the second half of 2010 or in 2011, “based upon overall market factors.”

Similar language is provided for the new inventory requirements.

Meanwhile, NADA says GM has agreed to work with its dealers “reasonably” regarding exclusive showrooms and may extend the December 31, 2009 deadline in certain cases.

GM also clarifies that the dealer’s waiver of protest “is not designed to allow GM to add new dealers into an existing dealer’s area of responsibility. GM intends only to realign current points, not add dealers to a market.”

According to NADA, GM will eliminate paragraph 8 from the agreements sent last week, which provided special rights to GM in cases where a dealer allegedly fails to meet the requirements of its franchise agreement. Instead of reserving special rights, any remedy sought by GM will be in accordance with state franchise laws.

GM also is providing clarifications to the wind down agreements it sent to dealers it is terminating later next year.

Today, 789 Chrysler dealerships will cease to operate unless the judge in the auto maker’s bankruptcy case does the unexpected and rules in favor of more than 300 dealers who objected to Chrysler’s dealer strategy.

The judge, Arthur Gonzalez, says he will issue an opinion today on the objections, but statements he made last week indicate he’ll likely rule in favor of Chrysler.

Last week, Chrysler President Jim Press along with General Motors President Fritz Henderson testified before a U.S. Senate committee defending their elimination of more than 3,000 dealerships combined.

Press claimed a bloated dealer network costs the company money. Although he mentioned at least three areas in which dealers cost an auto maker money, dealers argue the costs are passed down to them and that they pay for everything.

The need for a streamlined dealer network makes sense when you realize Chrysler is going from building 2 million vehicles a year to about 700,000 and from 38 models to about 13. Those numbers alone suggest there has to be some dealership paring.

The problem is the way Chrysler went about it giving its dealers 26 days to wind down their stores. Terminated dealers are receiving no money from the auto maker including not getting paid for inventory and parts.

It was only after the hearing last week that Chrysler guaranteed to help all its eliminated dealers get rid of their inventory.

GM at least, is paying its dealers who are being terminated. Henderson says its a “modest sum,” but it’s something. In addition, GM, unlike Chrysler, is letting dealers appeal a termination. According to Henderson last week, the auto maker has received more than 500 appeals and has reversed 11 terminations. GM dealers also have till October 2010 to wind down their stores.

You grew up watching your grandparents build a business, investing their life savings along with their tears and sweat. Your father, and perhaps mother, learned from them the value of hard work, honesty and the importance of community. They then taught the same lessons to you.

You watched as your grandparents — and parents after them — gave their money and time to civic organizations, schools and churches while providing jobs to people in town.

Perhaps you worked alongside your parents as a youngster, washing cars, cleaning windows in the showroom or sweeping out the service bays.

And then it was your turn to carry on the legacy. You were loyal to the manufacturer even when you weren’t sure what that was going to get you. You endured zone managers who often were fresh-faced, earnest kids out of college trying to tell you how to run your business.

You listened as the regional manager plopped a market study on your desk saying the market could sustain multiple dealers, while defending putting another dealership a few miles away.

You invested millions building a new facility to be compliant with your manufacturer’s plan of the month.

You tried to find ways to work with the manufacturer when it needed you to take extra vehicles. Yeah, they put the gun to your head and threatened your livelihood to “encourage” you to play ball but you stuck with the manufacturer through the tough times, doing what was necessary to help the brand survive.

Perhaps you even traveled to the nation’s capital a few months ago to lobby Congress to provide emergency funding to your manufacturer.

In February, when your auto maker’s survival was in serious doubt, you ordered more inventory because the company president asked you to.

Even with car sales plummeting, you managed to keep your business profitable and your CSI scores high. You were confident when the rumors of dealership reductions played out in the media. You’ve done everything necessary to protect your business, you’ll be safe.

And then the man in the brown uniform delivered a letter on May 14.

You knew without opening it. The business your grandparents, your parents and your family have built is being ripped from your hands and handed to the dealer a few miles away – the same one your regional manager argued would be good for the marketplace.

All of your investment is gone because the manufacturer, using the protection of bankruptcy, says it doesn’t have to pay you anything.

All because some consultant convinced President Obama’s task force that auto makers need dealers selling higher volumes. “You need more throughput,” they say. Even though they didn’t know what the word meant a couple of months ago.

The manufacturers didn’t push back because they see it as a great opportunity to force their dealers into complying fully with their demands while circumventing state-franchise laws.

The Federal government sees only the bottom line while turning its back on small business. The finance institutions are rewriting the rules and likewise have turned their backs on small business.

And the courts are rubberstamping everything the manufacturer and the task force want.

For dealers, there is no recourse.

This is America? I wonder if this is what the founding fathers envisioned.

Several weeks ago, President Obama guaranteed the warranties for Chrysler and General Motors vehicles. A noble gesture, but it means nothing if the dealers can’t get the parts to fix the vehicles. Apparently, it’s starting to become a problem for Chrysler dealers and likely will for GM dealers once that company declares bankruptcy.

Chrysler Vice President Steven Landry told dealers on a conference call just under two weeks ago that the auto maker was watching the parts inventory closely and managing it to maintain a 30-60 day supply.

With Chrysler in bankruptcy, several suppliers have stopped shipping parts to the auto maker. Add to that, none of the plants are running at the moment which means Chrysler is ordering minimal parts, if any.

Independent shops are starting to report they can’t get Chrysler parts.

Not only is the problem costing dealers service work, it’s going to start costing them sales. Yesterday a friend told me she needs to get the air conditioning fixed on her Dodge Caravan but the dealer can’t do it because the part is on backorder and has no idea when it will be shipped. I suggested an idnependent shop, but the vehicle is under warranty — which at this moment, isn’t worth the paper it’s printed on.

She’s leasing the vehicle and will try to turn it in if she can’t the air conditioning fixed. But whether she sticks with Chrysler, don’t count on it. “It’s not worth the hassle,” she says.

Three somewhat important news items that might have slipped under your radar last week…

First, the deadline for implementing the Red Flag Rules was again pushed back. This time from May 1 to August 1.

Second, as Ward’s predicted, Sonic Automotive Group did renegotiate its $105 million debt last week with bondholders (it was due May 7), agreeing to a higher interest rate in exchange for more time.

Finally, the top selling Porsche dealership, Champion Motors (FL) filed for Chapter 11 bankrptcy last week. I had lunch with the owners in Las Vegas a few years ago. Bright guys, but seemed a little young and a little too polished. Hopefully, they’ll be able to emerge with a little more seasoning and much wiser.

If you’re a General Motors or Chrysler dealer, this week might feel a little like high school when you were anxiously waiting for the coach to post the list of players who made the final cut for the sports team. Only this time, the stakes are much higher.

GM is beginning to send letters this week to 1,000-1,200 dealers whose franchise agreements they do not plan to renew.

Last week, Judge Gonzalez who’s overseeing the Chrysler bankrutpcy, scheduled the hearing for the sale of Chrysler for May 27, which means the auto maker has to mail certified letters for Thursday (May 14) delivery to dealers it plans to keep. Additionally, the list will be filed with the bankruptcy court on Thursday.

What about the dealers not on the list? No one seems to have an answer, although, lawyers involved tell me they think Chrysler also will notify those dealers on Thursday also.

(One caveat here — all of this is dictated by the court, and is subject to change.)

You can find the ruling here. It’s docket #492 and is 20 pages long (not counting the four exhibits). If you’re a Chrysler dealer, have your attorney look at it because it outlines what your options are and the time frame to exercise them.

You’re going to hear a lot in the next several days about executory contracts, designated agreements that will be “assumed” by Chrysler and “assigned” to the new company. That’s legalese referring to which franchise agreements Fiat will honor.

Keep in mind, Thursday is only the first cut. The list is preliminary. It’s likely dealerships will be moved on and off the list in the next several days. There will be a 30-day period beginning Thursday in which dealers can argue and trade their way onto the list, while Fiat will move dealers off the list.

There will be a lot of horsetrading going on the next 30 days. It’s possible, Chrysler/Fiat will use the list and time to complete the Genesis project — that is, making sure each surviving dealership houses all three brands.

Additionally, GMAC likely will determine to which Chrysler dealers it will continue providing floorplan financing over the next few months.

Another key point, if you are a dealer who makes the cut and has one of the older Chrysler Direct Dealer Agreements, you will have to modify the contract to match the current and newer Sales and Service Agreements. Otherwise, you will not make the final list of dealers who survive.

Interestingly, Chrysler President and Vice Chairman Jim Press’ claimed last Friday on a conference call with dealers the auto maker does not have an active plan, nor knows who, how many or knowsd what the process will look like for determining which dealers to terminate (read the story from Friday here).

According to the letter of the law, Press might be right. I’m hearing Chrysler isn’t necessarily making the decision of which dealers to keep. Instead, it sounds like everybody (except for dealers) with a stake in the new company might have a say.That’s the Capstone Investment firm that’s advising Chrysler on its bankrptcy; Chrysler; Fiat; the U.S. automotive task force and GMAC.

Dealers tell us their that dealer council members have told them the criteria for which dealers to save will be based on geographic location, financial health, customer satisfaction, condition of facilities and whether the dealership is meeting its minimum sales responsibility.

The big questions that remain unanswered are: how will Chrysler notify the dealers whose franchise agreements are not being transferred to the new company; and what happens to those dealerships? Are their franchise agreements immediately voided or terminated once the sale to Fiat becomes official?

Stay tuned. We’re working to find the answers to those questions. As soon as we know, we’ll get the word out.

One other note, a source tells us NADA has retained law firm Squire, Sanders & Dempsey to represent “affected” Chrysler dealers, that is, dealers not on the survival list.

Ward’s reported last week, that Arnold & Porter LLP, the law firm NADA retained to represent Chrysler dealers in the bankruptcy case, informed the trade association it will not be able to continue defending dealers slated for termination, because their interests will conflict with surviving dealers.

Chrysler informed its national dealer council Tuesday in a meeting in Auburn Hills, MI, the company is evaluating the viability of its 3,200 dealerships based on geographic location, financial health, customer satisfaction, condition of facilities and whether they are meeting their minimum sales responsibility.

Also important, court filings seem to indicate dealers could learn how they stand with Chrysler as early as Friday.

You can read the story here.