PHOENIX-Goodyear is staring down the barrel of yet another potential lawsuit by a disgruntled franchisee that claims it can no longer compete with the tire maker's policy of selling tires at cut-rate prices to discounters. Moreover, there is speculation that the currently contemplated litigation could end up as a class action on behalf of all Goodyear franchisees in Arizona.
A lawsuit is contemplated by the co-owners of Cactus Tire Inc. in Phoenix who have been in negotiations with Goodyear for almost two years attempting to resolve grievances in what they described as a relationship that has become extremely ``adversarial.''
Neither Dick Haugland nor Don Bender are encouraged by the talks so far, and said they expect to file a lawsuit against Goodyear by the end of January.
The lawsuit Cactus Tire is considering would concern alleged illegal business practices by Goodyear, and include charges that the firm has violated pricing provisions of franchise regulations and possibly even breached antitrust laws, Mr. Haugland said.
A Goodyear spokeswoman confirmed the company has had talks with Cactus Tire, but said the dealership has not filed any formal charges against Goodyear.
That suit would likely be modeled after a similar action filed last July in San Diego on behalf of a number of franchised Goodyear dealerships in California. Attorneys for Cactus Tire have met with representatives of the California Goodyear Independent Dealers Association, whose lawsuit seeks class action status.
Mr. Haugland said a number of Arizona Goodyear dealers have asked Cactus Tire to pursue a class action, as well. Statewide, they could number 20 to 25.
Things weren't always so antagonistic between Cactus Tire and its chief supplier.
The dealership has operated for 22 years in the Phoenix area as part of Goodyear's franchise program. And, according to Mr. Bender, ``it was a wonderful, wonderful program-until about 10 years ago,'' when he believes the tire maker's successful methods were financially impacted by a failed attempt to take over the company.
Don't ask Messrs. Haugland or Bender about the last two years.
A supply deal between Goodyear and Arizona's Discount Tire Co. Inc.-one of North America's largest independent tire dealerships-came home to roost virtually on Cactus Tire's doorstep. Two of its seven outlets are next door to Discount Tire stores, and a third has the giant tire retailer across the street.
Mr. Bender understands Goodyear's right to sell to whom it wishes, and even praised Discount Tire as ``good business people...(who) do a hell of a good job.'' But he charged that Goodyear's decision to sell to Sears, Roebuck and Co. and Discount Tire ``has essentially prostituted (Goodyear's) business.''
He and Mr. Haugland claim they can't compete with Discount Tire, which they said purchases Goodyear tires at a better price than the tire maker's franchisees are given, then turns around and sells those tires for substantially less than Cactus Tire.
Consequently, ``We can't and just don't compete with Discount Tire,'' Mr. Haugland said. ``Our tire sales are down to nothing-less than half or even 25 percent of what they were 10 years ago.''
Auto service now makes up 75 percent of the firm's business.
He also charged that, unlike Goodyear franchisees, Discount Tire gets its advertising co-op dollars up front from Goodyear, and doesn't have to abide by Goodyear's co-op policy to get them.
Mr. Bender said, ``Goodyear has threatened and intimidated'' dealers for years into remaining in its ``sole supplier program,'' which keeps them from being competitive. That allows Discount Tire to come in and ``dominate the marketplace,'' Mr. Haugland said.
He questioned how a dealer can face a longtime customer, who obtains a price quote on Goodyear tires from the dealer, then ``goes to Discount Tire and they sell him a tire for maybe $40 less. He then thinks I'm a damn thief. He loses confidence in me, and feels I've been ripping him off.''
Like many Goodyear dealers nationwide, Cactus Tire no longer carries only Goodyear-made tires, and has added Dunlop Tire Corp.'s Centennial associate brand.
Though prepared to slug it out alone with Goodyear, both owners agree that a class action suit presents more of a level playing field for the ``little guy.''
Both said they would prefer to avoid a legal confrontation, but, Mr. Bender added, wielding that club is ``the only thing Goodyear appears to understand.''