It’s Monday, July 13th, and here is your automotive news for today.
It seems that GM’s bankruptcy isn’t going as smoothly as they may have initially wish it. During their bankruptcy hearings they announced their plans to close thousands of dealerships, ultimately saving the company billions of dollars (which makes even wonder if they considered other areas that they could cut back, perhaps we all need to read a little more deeply into this).
There has now been action on Capitol Hill. Some members of congress are fighting this possible incline in the unemployment rate and it’s a non-bipartisan issue. One congressman described this as strong-arming dealerships into signing a deal by giving them fear of their own closure. Charles Grassley, a Republican senator from Iowa, has already introduced legislation in the House Appropriations Committee that directly address this. Reportedly, out of the two bills in question, one has already passed committee, and is working it’s way up the legislature.
This legislation would restore terminated franchises to their status before GM and Chrysler file for Bankruptcy. Additionally, this would force any further hearings of the closing of these dealerships to be heard in State courts, rather than national bankruptcy courts which will probably make it much easier for the dealerships to have a fighting chance.
GM issued an opposing statement on July 6th, 2009 through their National Dealer Council condemning the legislation. Which was quickly condemned by the Automotive Trade Association Executives Committee, who blast this letter claiming that this is just another example of GM’s heavy-handed tactics to get their way. However the spokesman for the company may not be lying when he says that if such legislation is passed, the company could be risking any progress they have made or would have made. I know the company doesn’t want to fire people, but this legislation would make it much harder to do so (maybe that’s a good thing) :/
