Congress works to stop GM, Chrysler Dealership Closures

By Automotive Staff | July 16, 2009
Chrysler and General Motors dealers who have been selected for closing have been looking for a last minute hero to step in and save them.That hero, it appears, is Congress. The House bill would restore the rights dealers have under state franchise laws. Many representatives felt these laws were ignored and dealerships are being forced to close as a result of the bankruptcy proceedings. Bankruptcy laws give companies authority to cancel contracts. A bill that would stop the closing of 3,300 dealerships.
However, even if the House passes the legislation, major obstacles wait for it in the Senate. For example, Senate Majority Leader Harry Reid (D-Nevada) has said that he is against the bill and will not bring it up to the floor of the Senate. The White House and, of course, GM and Chrysler, are against the legislation. More than 200 GM and Chrysler dealers visited Capitol Hill to lobby in favor of the legislation. They argued that if the closings are allowed, then more than 170,000 jobs could be lost. The White House is said to be telling Congressmen that the legislation could damage GM’s and Chrysler’s restructuring efforts. Others in the House are trying to make a deal. House Majority Leader Steny Hoyer (D-Maryland) met with GM and Chrysler execs in an attempt to work out some kind of deal. Hoyer favors the legislation. Most pundits are saying that the legislation stands no chance of passing both Houses of Congress especially after the comments made by Reid. Still, 241 members of the House are co-sponsoring it and 22 Senators are co-sponsoring a Senate version. Moreover, John Conyers (D-Michigan), a powerful member of the House and chairman of the House Judiciary Committee, favors the legislation and will be holding hearings on the bill later this month. via Detroit News

The number of dealers closing their doors is quite devastating. But I feel I need more info on this legislation before I put my two cents in, so stay tuned....