THE VIRGINIAN-PILOT
Copyright (c) 1994, Landmark Communications, Inc.
DATE: Sunday, July 24, 1994 TAG: 9407230228
SECTION: BUSINESS PAGE: D2 EDITION: FINAL
SOURCE: BY CHRISTOPHER DINSMORE, STAFF WRITER
LENGTH: Medium: 86 lines
Joshua P. Darden Jr. is proceeding with plans to sell half of his Colonial Auto Group to Hendrick Automotive Group, despite questions about Rick Hendrick's connection to a nationwide Honda scandal.
``We're going forward and we hope to close by the end of the month,'' Darden said.
Darden trusts that Hendrick had no part in a scheme involving kickbacks to officials of American Honda Motor Co.
``I'm just confident that Rick Hendrick isn't involved,'' Darden said.
While Hendrick has been questioned by Justice Department investigators, he told the Charlotte Observer that he hasn't broken the law, that he has cooperated fully with investigators and he isn't a ``target'' of the probe.
Hendrick Automotive operates dealerships with more than 85 franchises in 10 states, from North Carolina to California, including 21 Honda and Acura franchises in nine states.
At least 15 Honda officials have been charged by the Justice Department with taking bribes from dealers in exchange for franchises or allocations of scarce cars as a result of the federal investigation. No dealers have been charged yet.
The investigation is unrelated to Darden and his deal with Hendrick.
Darden and Hendrick had hoped to close the deal, announced in May, on July 1, but they still haven't gotten factory approval. Changes in new car dealership's ownership must be approved by the makers of the cars the dealership sells.
``When you have four different franchises it takes a while,'' Darden said.
Darden expects factory approval very soon.
Darden's Colonial Auto Group operates Chevrolet-Geo and Cadillac dealerships in Norfolk and Subaru and Mitsubishi dealerships in Chesapeake. The group had $91 million in sales last year.
J oshua P. Darden Jr. is proceeding with plans to sell half of his Colonial Auto Group to J.R. ``Rick'' Hendrick III and his Hendrick Automotive Group.
``We're going forward, and we hope to close by the end of the month,'' Darden said last week.
Hendrick has confronted publicity and questioning about a nationwide Honda scandal involving payments to American Honda Motor Co. officials in return for preferential treatment to dealers. Darden said he trusts that Hendrick had no part in the scheme. Darden and his dealerships are in no way connected to the Honda probe.
``I'm just confident that Rick Hendrick isn't involved,'' Darden said.
Hendrick Automotive operates dealerships with more than 85 franchises in 10 states, from North Carolina to California, including 21 Honda and Acura franchises in nine states.
Newspapers, including The New York Times, have published stories about a Justice Department investigation into payments to Honda executives, one case allegedly involving a Hendrick Honda dealership. Hendrick and his lawyers have adamantly denied any wrongdoing.
``Our view is that the (New York Times) story paints an unfair and really inaccurate picture of Rick by connecting a number of circumstantial incidents in an uncomplimentary way,'' said Max Muhleman, a spokesman for Hendrick.
``Rick is not a target of the investigation,'' Muhelman added. ``He enjoys an excellent reputation. He's probably the No. 1 name in the American auto retailing industry.''
While Hendrick has been questioned by Justice Department investigators, Muhleman said the auto dealer is cooperating; so far the investigation has focused on officials of American Honda.
Out of 16 Honda officials charged in the Justice Department probe, 13 have pleaded guilty to taking payments from dealers in exchange for franchises or allocations of scarce cars as a result of the federal investigation. No dealers have been charged.
Darden and Hendrick had hoped to close their deal, announced in May, on July 1, but Darden said Friday they still had not received manufacturer approval. Changes in a new-car dealership's ownership must be approved by makers of the cars sold by that franchise.
``When you have four different franchises, it takes a while,'' Darden said.
He expects factory approval very soon.
Darden's Colonial Auto Group operates Chevrolet-Geo and Cadillac dealerships in Norfolk and Subaru and Mitsubishi dealerships in Chesapeake. The group had $91 million in sales last year. ILLUSTRATION: FILE PHOTO
Joshua P. Darden Jr., left, and Rick Hendrick posed on one of
Darden's Colonial Auto Group lots in May, when they announced that
Hendrick would buy a half interest in Colonial.
by CNB