Disenfranchised Dealers Battle Chrysler, GM In D.C.

July 9, 2009
http://www.flickr.com/photos/pong/ Creative Commons license

http://www.flickr.com/photos/pong/ Creative Commons license

The U.S. House of Representatives is considering not one, but two bills that would provide legal remedies to the 2,100 dealers cut from the Chrysler and GM networks during each company's recent restructuring.

Although the text of those bills hasn't filtered into the congressional database just yet, reports indicate that both would return dealers to their respective networks, giving them the rights and legal standing they had prior to the time that Chrysler and General Motors filed for bankruptcy. As a result, reinstated dealers that have the wherewithal to reopen their doors could do so; those that couldn't open could force Chrysler and GM to repay them for a portion of their assets, as per state law.

The dealers' lobbying efforts for these bills have generated massive support in the House: one bill on the floor has nearly 200 co-sponsors, and the other flew out of committee with unanimous approval. Across the way, support in the Senate seems much more sparse, but to be fair, dealers haven't focused much attention on that side yet.

Obviously, Chrysler and GM are opposed to the two bills, insisting that the bloat of their dealer networks is largely responsible for their massive overhead and their subsequent losses. Furthermore, they argue, making payouts to closed dealerships would seriously curtail the amount of operating dollars at each company's disposal. Likewise, the Obama administration has stated strong opposition to these bills--which isn't surprising, since it helped engineer the dealer cuts in the first place. Whether congress will build enough support for this legislation to override a presidential veto remains to be seen.

The bitter irony in all this is that many of the elected officials who vociferously opposed the Detroit bailout mere months ago now insist that Chrysler and GM--which, by extension, means the federal government--prop up 2,100 more businesses. To judge by comments this story is generating online, the American public--who are finally getting used to the idea of a federally financed auto industry--aren't too happy about congress asking for a do-over. Drop us a line or leave a comment below to let us know where you stand.


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