GM, Chrysler fight House bills

July 10, 2009

GM, Chrysler fight House bills

Measures would reverse dealership cuts

BY JUSTIN HYDE
FREE PRESS WASHINGTON STAFF

WASHINGTON — General Motors Co. and Chrysler Group stepped up their lobbying Thursday against bills in the U.S. House that would reverse their cuts in dealerships, arguing the moves threaten their survival out of bankruptcy.

Meanwhile, Michigan Rep. Gary Peters, a Bloomfield Township Democrat, was trying to launch a compromise proposal that would compensate dealers, workers and suppliers damaged by the GM and Chrysler bankruptcies.

Dealers have been pushing bills in Congress that would undo any changes made by Chrysler or GM in their dealer agreements during their bankruptcies.

One version now has 221 sponsors in the House, more than the 218 it needs to pass, and dealers who back the proposal plan to push the issue with House and Senate members during a lobbying blitz Tuesday, with a House vote possible Wednesday.

Mark LaNeve, GM’s sales chief, and GM North America head Troy Clarke spent the day criss-crossing Capitol Hill, as did Chrysler Deputy CEO Jim Press.

LaNeve said he was attempting to explain to lawmakers why GM needed to close 1,300 dealers as part of its bankruptcy, emphasizing that the company gave dealers through next October to wind down their business.

Much of the outrage from Congress has been directed at Chrysler’s decision to close 789 dealers with less than a month’s notice as part of its bankruptcy.

LaNeve said in order for GM to be viable, the company had to have dealers who could face off against Toyota and Honda stores, which typically sell three to four times more vehicles per store than a GM franchise.

"In terms of creating a viable, competitive GM on taxpayer dollars, you can’t look in the mirror and say we didn’t have to restructure the dealer body," LaNeve said. "Everybody acknowledges, even dealers acknowledge, we had too many dealers."

In addition to reversing the dealer cuts, the bills would throw out the changes GM negotiated with the 4,100 dealers it chose to keep.

LaNeve said about half of those dealers had sent letters to lawmakers opposing the dealer bill.

Chrysler said in a statement that the House version of the dealer bill "would jeopardize the viability of the new company."

The proposal by Peters, which was still being circulated among lawmakers, suggested using money returned by banks under the $700-billion financial industry bailout.

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