FOR IMMEDIATE RELEASE: November 18, 1999

CONTACT: Will Woods (714) 734-1801

Chevron Threatens Dealers With Economic Retaliation

for Supporting Increased Competition and

Lower Pump Prices for Motorists


In response to independent dealer trade association efforts to open the gasoline market to increased competition and lower consumer prices, Chevron has noticed its lessee dealers that rents will double if such legislation is enacted! This unilateral action by Chevron represents an overt and blatant attempt to suppress testimony from their most informed and dangerous critics - their own dealers - in the ongoing public debate regarding the anti-competitiveness of oil company pricing practices at the local, state and federal levels.

A letter issued by Chevron Products Company on November 8, 1999 notifies every Chevron franchised service station dealer in California, Arizona and many southeastern states that Chevron Corporation will immediately increase their rents if legislation sponsored by dealer trade associations successfully passes or receives support in 2000. Chevron actually states in this letter that they are taking this action to increase service station dealer rents "in response to the many recent legislative initiatives sponsored by dealer trade associations."

Chevron regional managers have privately told dealers that this new rent program could effectively double the rents for larger service station operators. In this letter, Chevron explicitly tells its dealers that they will begin to change substantially higher rents upon a six-day notice if legislation sponsored by dealer trade associations receives support from public lawmakers. The letter states if any of the following events occur, Chevron will immediately pull the six-day trigger on higher rents:

 

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This is yet another example of the raw power and calculated efforts of the major oil companies to suppress their most informed and dangerous critics, their own dealers, in order to manipulate and shape public policy at the local, state, and federal levels to protect and maintain their anti-competitive profit taking.

Discussions are underway with several state attorneys-general, representatives of the Federal Trade Commission, and many federal, state and local legislators who have supporting such consumer-friendly legislation to investigate possible coercion, obstruction of government investigations and racketeering aspects of such actions by Chevron.

If you would like a copy of the Chevron letter faxed to you, please contact us.

AuTO-CA represents over 900 independently-owned service station dealers, auto repair shops, car washes and convenience stores throughout the state. Our members are not the major oil companies; we are small business owners.

Should you have questions regarding this correspondence or other materials you receive related to the oil industry, please don't hesitate to contact Will L. Woods, CAE, Executive Director, at the AuTO-CA office, 714.734.1801.