More than 3,100 General Motors and Chrysler dealers could be in line for a new lease on life as a House bill to overturn dealer closing passed a House committee vote last night. The bill, part of larger spending bill, will move to the House floor next Wednesday.
Championed by Rep. Steven LaTourette, R-Ohio, the bill would restore thousands of dealers that were terminated during bankruptcies at General Motors and Chrysler. GM plans to shed about 2,400 dealers through its bankruptcy process while Chrysler has already eliminated 789 dealers.
“Car companies have used bankruptcy to run roughshod over state bankruptcy laws,” LaTourette told Automotive News.
Not surprising, General Motors opposes the House bill. “Such legislation, if passed, would put our long-term viability at risk,” GM spokesman Greg Martin said.
“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. This legislation seeks to overturn the Bankruptcy Court’s decision after the fact to protect a single stakeholder among so many that have been called to sacrifice during our restructuring.”
Chrysler has yet to comment on the bill.
Although the bill passed a House committee last night, it still faces plenty of opposition. The move to reinstate all dealers cut by GM and Chrysler would largely negate the government’s efforts to save the Michigan automakers, which could prove to be a costly reversal for the U.S. taxpayers.
