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August 6, 2009
100 House Members ask Senate to help auto dealers
U.S. Rep. Steven C. LaTourette (R-OH) and 99 other House members today sent a letter to key Senate leaders encouraging them to retain House-passed language that will protect the economic rights of automobile dealers harmed during bankruptcy proceedings.
The bipartisan letter, signed by 100 House members, was sent to Majority Leader Harry Reid (D-NV) and Minority Leader Mitch McConnell (R-KY), and top lawmakers on the Senate Appropriations Committee -- Chairman Daniel Inouye (D-HI) and Ranking Member Thad Cochran (R-MI).
The House passed the financial services spending bill, H.R. 3170, which included the congressman’s auto dealer amendment, on July 16 by a vote of 219-208. Section 745 of the bill prohibits the federal government from spending funds to provide for dealership closures and requires that franchise agreements be restored for automakers that are at least partially owned by the government.
House members led by Rep. LaTourette are voicing their support for the provision as Congress looks toward conference negotiations with the Senate this fall. On July 9, the Senate Appropriations Committee passed its version of the spending bill, S. 1432, which does not contain auto dealer protection language. The bill will be considered by the full Senate some time after the August recess.
LaTourette said 789 Chrysler dealers were given just 26 days to shut down through a rapid-fire bankruptcy process, and only two states saw more Chrysler/Dodge/Jeep dealer closings than the 47 closed in Ohio -- Pennsylvania and Texas. The dealers were given virtually no help by Chrysler, including financial assistance to wind-down their dealerships. GM, meanwhile, plans to shutter more than 2,000 dealerships, and only Pennsylvania will see more GM closures than the 79 slated to close in Ohio. Those dealers will close over the coming year and many were compensated up to $1 million in exchange for closing and signing wind-down agreements.
“Auto dealers provide good jobs and play key economic roles in local communities,” LaTourette said. “The fact that an out of touch task force helped make the call to shut these businesses down, as well as the disregard for state franchise laws, does not sit well with me. I hope that in the fall the House and Senate can negotiate a bill that includes this provision which will correct the way that these dealers have been mistreated.”
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