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Saturday, December 14, 2013

The war between Clark Oil & Refining and it’s dealers


Typical Clark gas station in the 1970's
The dealers won the battle, but eventually lost the war.


12/14/2013 Back in the 1970’s, I was a franchised gasoline station dealer with Clark Oil and Refining Corp. While still in high school, I obtained a job pumping gas for a Clark dealer named Chuck Oleson. He was a great guy to work for and actually helped several of his employees, including me, get their own stations. My station was at Hampton Ave and Santa Monica Blvd in Milwaukee and I was just 19 years old when I became self-employed.

After getting settled in, I was making pretty decent money and envisioned a long and successful partnership with Clark Oil & Refining. There was trouble brewing on the horizon, however. Clark Oil gave it’s dealers a lot of help and training with their businesses, but treated them more as employees than the independent franchise owners that the oil company had us legally set up to be.


As you can read in the very in depth article from the Milwaukee Journal Archives below, a war soon broke out between the dealers and Clark.  In fact, I was almost named the lead plaintiff in the 1973 lawsuit but the lawyers selected Myles as their best prospect. After a long four year battle, the Association I was a member of won a 1.9 million dollar settlement, but Clark eventually succeeded in forcing the dealers out, mainly by keeping the wholesale cost for gasoline higher for us than actual market prices. In fact, at times our wholesale price from Clark was nearly the same as our competition’s retail price at the pump! Their goal was to get rid of the franchise owners, install salaried managers in all the stations, retain a higher level of income and assert control over all operations. The big move to self-service stations in the 1970’s and 80’s didn't help either, as all you needed were shelf stockers and a body behind a cash register to run the business, not someone skilled in managing full service customer attendants. Clark had the financial deep pockets to outlast the independent dealers. Alas, all did not go very smoothly for the company in later years. Founder Emory T. Clark sold his interest in the company in 1981 to Apex Oil, a St. Louis, Missouri-based company. In 1985, Apex decided to sell Clark Oil. By 1987, Clark and Apex were bankrupt.[1] (source: Wikipedia)
Me at my old station on Santa Monica with the 
new design 2008.

All in all, my time with Clark was a good experience, I made a living for over 10 years and worked with some great people who have have been life long friends. Also, as a young man, gaining valuable experience in business practices, accounting, negotiation, communication and customer service skills, helped me immensely in later years.


I’d like to give special mention here to my old boss, Chuck Oleson. He hired me as a third shift attendant at his Clark station a few weeks before I started my senior year of high school. My buddy Ross from school was working for him and got me an interview.

I learned a lot of life lessons from Chuck, who was a great guy to work for. Most of the crew did a good job because he was well liked and respected by his employees. Chuck was such an outstanding and unselfish person, he helped at least five of his employees get their own franchises, including me. After high school I was looking to find my way, tried a couple of factory jobs (Harley Davidson was one), but I just couldn't do it. Staring at a clock while on an assembly line seemed like ‘nuts’ to me. Chuck hired me back after I came begging, put in a recommend to get my own station and got me started in a decent career. For that I will always be grateful. For one of Chuck’s life lessons, see The Stamp Book Story. Update: Sadly, Chuck passed away way to early on Aug 28, 2015 at the age of 74.



Left to right: Bob, Chuck, Karl & Ross 12/01/2013
I've known these guys since the late 1960’s. I met Bob at Chuck’s station after he got back from serving in Vietnam and he has been my closest friend for well over 40 years. Chuck helped him get his station at Teutonia and Villard in Milwaukee. My high school buddy, Ross worked for Chuck and was the best man at my wedding (the first one), Karl was a fellow attendant and friend that Chuck helped to get a station at 76th and Bradley in Milwaukee. Comments by Karl follow the article along with a cool YouTube video of an old Clark commercial.

Article thanks to Mildred Freeze and The Journal Archives. Link Provided below:
Nov 23, 1976  Several Clark Oil service station operators without much money or influence decided four years ago that their oil company was wrong and they were going to do something about it. Their fight ended last week with a 1.9 million settlement plus a restructuring of their relationship with Clark Oil and Refining Corp.


The lawsuit is interesting for several reasons, but it is difficult to relate them without getting involved in the complexities of the case. It is remarkable primarily because the operators were not even a united group when the court fight began. They were simply individuals who felt cheated.


Against the advice of one attorney, they found a law firm with enough resources to challenge the oil company. Attorney William E, Glassner, Jr. was sympathetic enough with them to work out a way to pay him without putting them out of business. It is expensive to fight an oil company. The operators had to persuade men who were earning $10,000 to $20,000 per year to pay a $75 initiation fee to belong to the Clark Dealers Association plus $25 per month for two years.


The operators had to believe Peter H. Gardner, now chairman of the dealer’s group, that they would get their money back and the frustration and uncertainty were worth the initial sacrifice. Many were unimpressed with that explanation. The dealer organization numbered 176 station operators when the case began and 68 on the final day. The group lost many members when individuals were assessed $1000 in attorney fees.


In a little more than three years, Gardner paid out $5000. There were some who paid more. Members were asked to pay a tenth of a cent to the organization for every gallon of gas they pumped. The station operators paid $133,000 out of their pockets to keep the lawsuit going.
Now they will get their money back and more.


When the settlement was approved by Federal Judge John W. Reynalds, Glassner’s firm received $351,619 and a Chicago firm that started a separate action and whose case was joined with the Milwaukee case was paid $194,277. “The attorneys never asked us to pay the whole thing”, Gardner said. “Just to do the best we could. If it weren’t for Glassner, we wouldn’t have made it.” Along the way, Gardner said, “our biggest fear was that we wouldn’t be able to hold out and the company knew that.”


The federal suit is among the first few class action antitrust cases. Normally antitrust cases are brought by US attorneys. Private lawsuits generally follow government cases. Although the dealers asked for help, no government agency was interested in their cause.


Glassner said of the fight: “I’ll never start another class action. Everybody becomes an attorney. Those people who shout the loudest do the least work. Too many people took a free ride.” If he were to do it over he would name the individuals in the case. While indicating his frustration with the case, he said people in his firm working with dealers accomplished some things. They thought the dealers how to clean up their accounting practices. They showed them how the court system operated and how they could apply legislative pressure.


Efforts Pay Off
They also found out how to get gasoline from other sources and how to merchandise it. The most significant thing, Glassner said, was the passage of the Wisconsin Dealership Act, which the operators lobbied for in the Legislature. it provides operators with security they did not previously have.


The federal suit, filed in February, 1973, alleged that Clark had fixed retail prices on gasoline, disciplined dealers through the use of one year leases and short termination provisions, limited dealers to the purchase of Clark branded products and unfairly competed with dealers by having company owned stations. The suit was filed by Myles Jackson, who operates a clark station at 2514 N. 27th St., “on behalf of himself and others similarly situated.” Jackson was chosen because his lease was up for renewal and contained new rent charges that dealers found objectionable.

Important Ruling
A breakthrough came almost a year later when Reynolds ruled that the lawsuit could be pursued as a class action. “We are not rich men,” said dealer Charles Hohlweck then. “This gives us the chance to fight the big oil company. it’s a tremendous victory,” Hohlweck has since left Clark and buys gasoline on the open market.


Gardner organized dealers on Minnesota, Wisconsin, Illinois and Indiana. He viewed the experience as an educational process. “There was a lot of frustrations at first. We just grew with it,” he said. Clark Oil served him with eviction notices three times during the fight. He was without a lease for almost a year. The eviction efforts against him and others went into state courts and were held up until the federal case was finished.


Gardner is 35, one of 11 children of a Vermont farmer. After high school he went into the army and married a German, Luise. In 1962, after getting out of the Army, he chose to live in the Milwaukee area because of it’s German community. After a job as a dry cleaning salesman, he became a tool and die maker trainee at Amron, Inc., Waukesha, where he stayed six years. He joined the union and became vice president and head of the bargaining committee. That union experience was useful during the court battle, he said.


While at Amron, he also worked part time for a Clark station. Five years ago he took over the station at 1025 S. 108th St., West Allis. A year after he became a dealer, Gardner was in trouble because he wouldn’t sign Clark’s new lease calling for a percentage on the cigarettes and miscellaneous items that dealers sell. He heard about a Clark dealers’ group being formed in Chicago and went to a meeting. Then he learned of some Inner City Milwaukee Clark dealers who were having trouble, and he met with Hohlweck.


Another breakthrough that affected the case came in Minnesota. A new state law gave  dealers franchise rights, and Clark Oil responded by evicting all Minnesota dealers the very same day. Gardner flew to Minneapolis that day and signed up 40 dealers for the dealer organization. They were subsequently protected by a court injunction pending the outcome of the Wisconsin case.
“A strange thing happens to people when an adverse thing happens all at once,” Gardner said. In Minnesota the dealers joined at once and they stayed. In Wisconsin “we could only get them when Clark picked on them.”


The dealers preferred to have their case presented in open court, Gardner said, but by settling with the company, they were able to get automatically renewable three year leases. and they got the right to negotiate and go to court if necessary without threatening their livelihood. “Now we’ve got to enforce what we’ve won and no one else will enforce it but us,” Gardner said. “We have to stay together. It will be difficult without adversity.”


During the four years many service stations went out of business. With the increase in gasoline prices, self service stations grew. Many Clark stations closed.
About 1,000 dealers still in business will profit most from the action. In addition to their three year leases, each will get $900 in gasoline credits. The settlement also includes those that went out of business during the court fight. After attorney fees and costs of investigation are paid, there will not be enough left for individuals to receive more financial compensation. But the big battle has been won.


Comment thanks to Karl:
Clark Super 100
Hi Dan, The time I spent at Clark was a great life experience for me. I checked in on March 2, 1972, I was just 21 years old. My station at 8015 N. 76th St. in Milwaukee was Clark Station # 1565, I was Dealer# 6585. The Clark Territory Salesman was Richard Theesfeld, he checked me in. Theesfeld is now deceased, he died in 2006 at age 68. His lived in East Troy as I recall. I was excited about the new shopping center about to open in the area, Northridge Shopping Center. I spent 11 years as a Clark Dealer leaving in March 1983. I got a job with Milwaukee County Transit System as a bus driver in 1979. Chuck & I became partners at my station in 1979, he ran the station for me. It was a hard decision, but we ended my lease with Clark and Chuck on stayed on as a station manager working for Clark. In between working at his Clark station on Hopkins & Silver Spring Dr. Chuck worked for Moore Oil as a route salesperson. He joined me at my station because he did’nt like the work at Moore Oil. That’s all for now, I’ll continue this story in my next e-mail. Here is a picture of Bob, Ross, Chuck, & me taken last Sunday (Dec 1, 2013). Karl
Clark, Part II
Dan, A few other Clark details I can remember. Chuck came from Waukesha. He worked at a Clark station there will in high school. He got his own station at Hopkins & Silver Spring Dr. about 1960. He left the station and joined the US Air Force. When he left the service he was reinstalled in his old Clark station in about 1964. I think his station was Sta.# 76, it was much older than my station. He was dealer # 1924. Bob and Kenny’s stations nearby were about the same age as Chuck’s station. I must also mention Ken. He was a great help to me the first few weeks I was in business. I needed help with learning reports and Ken was there to lend a hand. I know he wanted his own station and later Clark put him in at 26th & Silver Spring Dr. in Glendale. I always felt my station never did the kind of monthly gallons it should of. Given the high volume of traffic on 76th St. One problem I had to deal with was a 45 MPH speed limit on 76th St. A quick look and you fly right by at that speed. The next Clark Station going south on 76th St. was at Medford St. (near Fond du Lac Ave, Villard Ave. & 76th St.). I still see Jim R., if you recall he was a Clark Sales Rep. too. He lives right here in Port Washington not far from me. That’s it for now. Karl


Thanks Karl!
Jim R.! I remember him well, he was a good guy that was put in a tough spot between the dealers and Clark. I had a couple confrontations with him, but always liked him personally. Oh, that brings up a memory of screeming at him at 3AM in the morning as I tried to close my station to go home for a couple hours to sleep. The third shift jerk I had didn't show up for work. Jim was out in the middle of the night checking my station! He said I had to remain open or I would be breaking my lease agreement. LOL! It was nothing personal against him, oh my, he must have thought I was nuts!.  If you see him, please tell him hello and I wish him well!
Thanks for the great info Karl. You have quite a memory, hope you don't mind if I use some of your input in my post. I will not use last names unless I have specific permission.
Dan


Clark Brands

From Wikipedia, the free encyclopedia  http://en.wikipedia.org/wiki/Clark_Brands
Clark Brands, formerly Clark Oil, began as Clark's Super Gas and was a 20th-century oil company headquartered in MilwaukeeWisconsin.
Founded by Emory T. Clark in 1932 as a single filling station on the corner of 60th St. and Greenfield Ave. in West Allis, Clark Super Gas sold only premium gasoline. Unlike most contemporary service stations, Clark stations did not offer mechanical maintenance and tire changing.
In 1943, the company moved into refining oil. By the mid-1950s, the company operated nearly 500 gas stations throughout the Midwest, with locations in Illinois, Indiana, Iowa, Michigan, Minnesota, Missouri, Ohio and Wisconsin.
From 1948 to 1950, Clark Super Gas sponsored the Milwaukee Clarks, a minor league ice hockey team in the International Hockey League.
At its height in the 1970s, Clark Oil was the largest independent oil refiner and marketer in the Midwest with 1,489 stations and two refineries, one inBlue Island, Illinois and the other in Hartford, Illinois. The average Clark station sold twice the number of gallons as the national average, and its emphasis on premium gasoline gave the company a high profit margin.
Emory Clark sold his interest in the company in 1981 to Apex Oil, a St. Louis, Missouri-based company. In 1985, Apex decided to sell Clark Oil. By 1987, Clark and Apex were bankrupt.[1]
In 1992, a division of Toronto-based Horsham Corp. bought Clark Oil and Refining, which included the two refineries and around 1,000 gas stations. The company's name was changed to Clark Refining and Marketing.[1] Horsham expanded the company, buying a Lima, Ohio refinery from BP, and a Port Arthur, Texas refinery from Chevron. Horsham became TrizecHahn, and then sold 80% of Clark to The Blackstone Group, another investment firm, and another portion to Occidental Petroleum.[1]
In 1999, the company sold its retail unit and rebranded itself as Premcor. In 2001, many Clark stations in southeast Michigan were closed permanently. In 2003, Clark Brands, LLC was formed and purchased the Clark brand and other portions of the Clark business, with a primary goal to license the Clark brand to independent operators.[2] Clark gas stations are now operating throughout 28 states, with over 700-branded locations, some with convenience stores under the On the Go name.[3][4]


3 comments:

  1. I would like to add that Chuck Oleson (Olson?) also hired me, a younger brother to Dan, about 1971. It was a learning experience in the retail and hard work industry. The summer of '71' I worked night shift full time, as well as another day job full time at Grant's Department store, as well as a part-time job at the American Dry Cleaners in Butler. Over 90 hours per week people! At the age of 17. Perhaps parents should encourage their kids they have more energy than they think. Anyway, thank you Chuck Olson, and my brother, for getting me that job. Cigarettes 32 cents a pack?

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    1. I too worked for Clark in the early 70's but at 2 locations splitting shifts between them. 26th & Silver Spring and the one on 60th & Fon duLac. Kitty Corner from Capitol Court. I know the station on Santa Monica as it was next door to my dads favorite pizza joint..Giuseppe's!

      Fags may have been 32 cents a pack but gas was 26 cents!!!

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    2. Did you work for Ken Lord on 26th & Silver Spring? He was a dealer at that station in the early to mid 70's.

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