House Bill Wants to Reinstate Terminated Dealerships

Frank Williams
by Frank Williams

The House Appropriations Committee has passed a provision in the 2010 financial services spending bill that would require GM and Chrysler to work through state courts—instead of the federal bankruptcy court—to terminate dealerships. Rep. Steven LaTourette, R-Ohio, sponsored the amendment. Ignoring the fact that federal bankruptcy law trumps state bankruptcy law, LaTourette explained, “Car companies have used bankruptcy to run roughshod over state bankruptcy laws.” In reporting this, Automotive News made what has to be the understatement of the month, if not of the year: “GM opposes the House bill.” Ya think???

GM mouthpiece Greg Martin claims the legislation would “put our long-term viability at risk.” To back up this assertion, he stated “We’ve taken extraordinary efforts, from product planning to manufacturing to labor agreements, to reinvent the company, and we need a dealer network to match.”

Whoa! Did he say they’ve “taken extraordinary efforts” in “product planning?” Let’s see . . . they’re planning Cadillacs that overlap Buicks, Chevys that overlap Buicks, a redundant line of badge-engineered trucks and killing the brand with two cars unique to their lineup (G8 and Vibe). I could go on. Suffice it to say, GM has some legit reasons for killing dealerships; but “product planning” isn’t one of them.

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  • Nathaniel Nathaniel on Jul 10, 2009

    Both sides of the political fence are supporting this. No reason to think it would be any different had the country gone the other way in the election. What that means is that we need to stop blindly supporting the current two so that we can have another viable option to keep them honest.

  • SCE to AUX SCE to AUX on Jul 10, 2009

    @nathaniel: You are correct. GB2 supported the original bailouts; OB1 just put the pedal down. Both are Changes I Don't Believe In.

  • Geotpf Geotpf on Jul 10, 2009
    Michael Karesh : July 10th, 2009 at 11:24 am Sounds like a good way to go…for the lawyers. Federal bankruptcy law entirely trumps state bankruptcy law. If passed, this could get struck down as unconstitutional. It's prefectly constitutional for the Federal Congress and President to sign a bill that changes this. Not that it's a good idea, but there are lots of bad ideas that are constitutional.
  • Hnay Hnay on Jul 15, 2009

    Are there any car dealers or car dealer relatives who have posted? I think not. My father is a Dodge dealer. I believe in capitolism, but... what chrysler did to my father was robbery. He was a viable dealer selling 50-60 cars per month but... because he did not do what they wanted because he did not see some of the things they wished as sound business decisions they decided they wanted someone else in his market. If the market is not viable close the dealership. I understand that. But guess what.... Chrysler has given the dealership to another dealer which my fathers old facility will be houseing for rent since he owns the property. How many more dealers are there like him? I think many more than people want to admit to. Where is the democracy in that? This is the reason that franchise laws are in effect. This is the reason that the bill MUST pass! In order to hold accountable a company that used the court system to bypass franchise laws on people that they did not want in place. My father has kept a viable company profitable for over 39 years... how much did chrysler and GM combined make last year? O zilch nothing and they think he is the one who is not an appropriate business man.