1-800-car/16.5″/mike1st/mark2nd
BEN SULLIVAN Staff Reporter
Vehicle Information Network, the Westlake Village-based operator of 1-800-CAR-SEARCH, has laid off its entire staff and shut down its core service of telephone-based classified advertising for used cars.
CEO Stender Sweeney said Vehicle Information Network is regrouping in preparation for being merged with or acquired by another firm, after which the service hopes to focus on using the Internet to sell cars. The company already maintains a Web page for finding and listing autos.
Sweeney would not say which firm or firms his company is in talks with, nor would he disclose whether the privately held Vehicle Information Network, of which former NBC executive Grant Tinker has been chairman and a primary investor, plans to rehire any employees.
In October 1996 the company employed 55 people.
“We are focusing on some alternative strategies that will involve other companies beyond 1-800- CAR-SEARCH,” Sweeney said. “It boils down to strategic alliances, but I can’t describe them yet because we’re not far enough along in the process.”
Sweeney also would not say whether Vehicle Information Network is preparing to declare bankruptcy in light of the layoffs.
When contacted last week, Tinker said he is unaware of the firm’s status.
“You’re talking to the wrong guy,” Tinker said. “I’ve been out of it for some time. Maybe on paper I am (still involved), but not in terms of knowing what’s going on.”
Tinker’s business manager Sidney Tessler, president of management firm Tessler & Co., said Tinker remains an involved investor in Vehicle Information Network. Tessler said the car search company is “going through a review of our systems and software and stuff like that.”
Vehicle Information Network was the subject of an October 1996 Business Journal profile that described the company as fast-growing and aggressive. At that time, Sweeney said the company was poised to expand nationally. It had advertised extensively on local radio.
The pre-Christmas layoffs and shut down were prompted by a lack of financing needed to make the telephone car search service succeed, according to Sweeney.
“Nothing was wrong with the scenario, but it required more cash, a larger investment to get it to break even, than the investors were prepared to put up,” he said.
One of those investors, according to individuals familiar with the organization, was Advanta Corp., a Pennsylvania-based consumer financial services company with more than $18 billion in managed assets. Advanta’s senior vice president of administration, Chris Derganc, at one point served as Vehicle Information Network’s president.
Derganc could not be reached for comment last week. Advanta spokeswoman Phyllis Hoffman said her employer had invested in Vehicle Information Network but had recently declined an option to acquire a controlling interest in the company.
Hoffman further said she does not know whether Advanta had been informed in advance of the shutdown.
The halt in operations caught at least one shareholder off-guard. Mark Brenner, who helped found the company in 1992 but left when Advanta became involved in mid-1995, said he was as surprised as anybody to hear of the closure and disappointed by the news.
“I invested a lot of money into this company,” said Brenner, who describes himself as still a “significant shareholder.”
“I was told that the company was doing well and now the company’s shut down,” said Brenner, adding that he plans to investigate “the discrepancy between what I’ve heard and what has happened.”
Vehicle Information Network’s 1-800-CAR-SEARCH service offered free lists of used cars to prospective buyers, and charged sellers between roughly $30 and $130 to have information about their vehicles included in specialized listings.
