Culled Dealers Dig In Over Deal

As soon as GM and Chrysler agreed to review their dealer cull decisions, the culled dealers in question began complaining that the review would not improve their situations. According to the aggrieved dealers, the new review would be based on the same allegedly flawed data as the initial cull, meaning nothing would be changed. By GM’s own admission, only 39-51 of the over 1,000 dealers cut would even stand a chance at reinstatement. Now, Automotive News [sub] reports that a new measure has passed the House of Representatives which would allow dealers to “present any kind of relevant information during the arbitration.” The measure comes in the form of an amendment to the House Financial Services bill, which is headed to a conference committee in which House and Senate leaders must arrive at a compromise in order to send the bill to President Obama.

The National Automotive Dealer Association had criticized the GM and Chrysler review process, saying:

NADA appreciates the good faith and constructive dialogue we have had with GM as we try to build a consensus to ensure that GM and its dealer network are as successful as possible. GM’s announced plan to address the issue of dealership closings is a positive step, but we do not believe it establishes a sufficiently meaningful process that provides for a reasonable opportunity for dealer reinstatement.

But strangely, the passage of this revision has not drawn NADA’s unqualified support:

NADA supports this approach unless GM and Chrysler agree to an alternative that addresses dealer concerns. The revised amendment would give affected dealers transparency and the right to arbitrate. The arbitrator would balance the interests of the dealer, the manufacturer and the general public. Regrettably, the revised amendment would not provide compensation for affected dealers.

The revised LaTourette amendment is part of the final negotiations on a year-end spending bill necessary to keep the government operating. These leadership-driven negotiations on the broader bill will occur during the next few days. The language could be accepted, rejected or modified. NADA is working aggressively with all parties to achieve a meaningful opportunity for dealer reinstatements.

The Detroit News reports that another round of meetings between GM, Chrysler and their culled dealers is under way. The battle continues…