Suzuki will continue to sell its motorcycles and boats through separate dealerships, but is offering its car dealers cash payments within 10 days if they tear up their franchise agreements voluntarily. Parent company Suzuki will offer the loan, which won interim court approval, at a below market rate.
It’s part of a plan by Suzuki to avoid long legal battles with its 216 dealers, but things might not be so simple. That’s because various state laws protect dealers from being forced to shut down by their manufacturers. If they decide to shut down without a fight, Suzuki will pay them half of what they are owed by the distributor within the 10-day period.
The $45 million figure is only the beginning. American Suzuki will return to court in the coming weeks seeking approval to borrow as much as $100 million.