Both Senate and House leaders have reached agreement on a bill that will provide rejected dealers access to third-party arbitration with broader criterion than initially planned by GM and Chrysler .
The new bill will expand the possible criterion for rejected dealers to give them greater consideration for reenactment. According to Congress, this bill is intended to provide better balance for the dealers, automakers and the public.
The bill states that dealers that successfully make their case to be reinstated will receive a letter from their respective automakers within seven days of the arbitrator declaring their reinstatement.
Steny Hoyer, House Majority Leader, said, “It is imperative for both auto dealers and auto companies to have a transparent process that gives dealers a chance to make their case for remaining open, while respecting the companies’ need to return to profitability.”
The bill will receive a final vote by the House this week, and the Senate before the end of next week before going to President Obama for final approval. If passed by President Obama, rejected dealers will have a 40 day window to decide if they want to pursue arbitration – and the arbitration itself must begin within 140 days from then.
The new bill was heavily favored by both the National Automobile Dealers Association and the Committee to Restore Dealer Rights, which championed to provide better terms for rejected dealers.
GM’s spokesman, Greg Martin, said, “We will continue to work constructively with congressional members and dealers on a resolution that balances the interests of GM and its dealers.”
In a similar statement, Chrysler said, “We are committed to work with Congress and the dealers to achieve a process that equitably balances the interests of the discontinued dealers, our current dealers, and the taxpayers relying on Chrysler to repay its loans.”
