House Committee Votes To Restore Terminated Dealer Franchises
By Michelle Krebs July 9, 2009WASHINGTON -- A bill approved by the Appropriations Committee of the U.S. House of Representatives requires General Motors and Chrysler to restore franchise agreements with auto dealerships they terminated as part of their bankruptcy proceedings.
U.S. Rep Steve LaTourette, R-Ohio, who sponsored the bill, said the automakers failed to show cost savings associated with having fewer dealers and called the White House backing the elimination of dealers as "un-American."
Chrysler terminated 789 dealer franchises effective June 9. GM does not plan to renew the franchise agreements of about 1,400 dealers when their current contract expires in October 2010 to leave the automaker.
White House officials and executives from GM and Chrysler met with Congressional leaders in advance of the committee vote to try to head off the legislation.
The full House considers the measure next week and is likely to pass. It would also have to be approved by the Senate.
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