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July 8, 2009
Panel approves LaTourette effort to help auto dealers
U.S. Rep. Steven C. LaTourette (R-OH) today announced that the House Appropriations Committee has approved a measure that would force Chrysler and GM to restore franchise agreements that were killed in bankruptcy proceedings or terminated by automakers.
The panel last night approved the plan by LaTourette by voice vote, meaning no recorded vote was necessary. Appropriations Chairman David Obey (D-WI) pushed for passage of the LaTourette amendment, and said he would protect the amendment when the Financial Services appropriations or spending bill goes before the Rules Committee.
LaTourette said the bankruptcy courts have eviscerated state franchise laws that protect automobile dealer franchise agreements. He said 789 Chrysler dealers nationwide were targeted for closure through bankruptcy and given weeks to unload their inventory at fire-sale prices. GM, meanwhile, wants to shed 2,000 dealerships through wind-down agreements, where the dealers have about 16 months to sell their inventory and shutter their dealerships.
LaTourette said his amendment requires that franchise agreements be restored for automakers that are at least partially owned by the federal government.
“I don’t think Chrysler or GM has been able to demonstrate there is a savings associated with fewer dealers, since the dealers themselves bear the costs of operating their dealerships with little help from the manufacturers,” LaTourette said. “I think the closing of these dealerships was punitive and secretive, and it’s the most un-American thing for the government to help force you out of business and deprive you of the American dream.”
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