Friday, July 17, 2009

U.S. House Passes Bill Making GM, Chrysler Rehire Car Dealers

By Brian Faler Bloomberg

July 17 (Bloomberg) -- The U.S. House approved a plan, opposed by President Barack Obama, that seeks to force General Motors Co. and Chrysler Group LLC to restore agreements with dealerships shed during the automakers’ bankruptcy proceedings.

The provision, part of a spending bill that passed 219 to 208 yesterday, would require the automakers to restore franchise agreements with thousands of dealers as a condition of receiving federal aid. Lawmakers said the companies terminated dealerships with little notice or explanation.

“There is so much confusion about how they went about it,” House Appropriations Committee Chairman David Obey, a Wisconsin Democrat, said before the vote. He pointed to a dealer in his district who he said “runs a good business.”

“I do not, for the life of me, understand why he would be knocked off,” Obey said. Lawmakers “are trying to send a message they want clearer decision-making in terms of who got weeded out and who didn’t.”

Representative John Dingell, a Michigan Democrat, opposed the measure, saying it would hamstring the companies’ rebuilding efforts.

“This is a very fragile industry and its survival even without that amendment is not necessarily assured,” Dingell said. “The amendment could be a burden that the industry simply cannot carry.”

Representative Steve LaTourette, an Ohio Republican who proposed the plan, said it wouldn’t necessarily require the automakers to keep the dealerships open, only that they end agreements in accordance with state franchise laws. That procedure, which would mean compensating shuttered dealers who may now be in another business, was short-circuited by the bankruptcy courts, he said.....More

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