House panel seeks to protect GM, Chrysler dealers

Congress will take up the contentious issue of closing auto dealers this month, after the House Appropriations Committee approved an amendment that seeks to overturn the decision by General Motors Corp. and Chrysler Group LLC to close nearly 3,000 dealers. U.S. Rep. Steven C. LaTourette, R-Ohio, said the proposal would "force Chrysler and GM to restore franchise agreements that were killed in bankruptcy proceedings or terminated by automakers."

The amendment passed late Tuesday on a voice vote to the Financial Services spending bill, which has the support of Rep. David Obey, D-Wis., the House Appropriations Committee chairman.

Another House proposal to hamstring GM's plans to terminate franchise agreements with nearly 1,400 dealers, and seeking to reopen 789 Chrysler dealerships that closed last month, has 202 co-sponsors, including House Majority Leader Steny Hoyer, D-Md., and House Financial Services Committee chairman Barney Frank, D-Mass.

Three Michigan Republicans — Thaddeus McCotter of Livonia, Pete Hoekstra of Holland and Vern Ehlers of Grand Rapids — have backed the bill.

GM wants to pare back its nearly 6,100 dealers to between 3,500 and 3,800 by the end of next year. It expects 1,280 will close their doors voluntarily during the period.

GM spokesman Greg Martin said the bill, if passed "would put at risk our long-term viability."

"Our restructuring, approved by the court, includes actions across all aspects of our business to become stronger and more competitive," he said. "We need the right dealer network to match a reinvented company." More at Detroit News