June 9, 2009 Legislation Introduced in Congress to Restore Dealer Rights in the Chrysler & GM Bankruptcies Key Democrats in the House Sign On to the Bill

Tomorrow afternoon, June 10, 2009, in the House of Representatives, Rep. Chris Van Hollen (D-MD), assistant to the speaker, and Rep. Steny Hoyer (D-MD), majority leader, will join Reps. Dan Maffei (D-NY) and Frank Kratovil (D-MD) in announcing their joint support of the Automobile Dealer Economic Rights Restoration Act of 2009 (HR 2743). A press conference is scheduled for 1:15 pm, outdoors on the House Triangle, East Front of the Capitol. (Rain location – H-144, Capitol Bldg.) 

This legislation, introduced by Reps. Maffei and Kratovil, will put dealer franchise rights back in place after they were summarily set aside with the recent reorganizations in bankruptcy of Chrysler and  General Motors.

The lawmakers have been persuaded by dealer constituents, their employees and customers that terminating dealer franchises – 25% in the case of Chrysler and higher with GM – is unnecessary, unfair and hazardous to the already stressed economy.

Specifically, HR 2743 will:

• Restore the economic rights of General Motors and Chrysler car dealers as they existed prior to each company's bankruptcies.

• Preserve General Motors and Chrysler car dealers' rights to recourse under state law

• At the request of an automobile dealer, require General Motors and Chrysler to reinstate franchise agreements in effect prior to each company's bankruptcies.

• Make clear that the legislation is not intended to make null and void the court-ordered transfer of assets from Chrysler LLC to New CarCo Acquisition LLC or the transfer of General Motors assets that could be approved by a court after the introduction of the Act.

In joining Reps. Maffei and Kratovil as an original co-sponsor of the bill, Rep. Van Hollen said, "Our efforts to revitalize the auto industry in America must include a vibrant dealer network to sell and service first rate Chrysler and GM products. These small businesses employ hundreds of thousands of people and are an integral part of local communities all across this nation."  He said the legislation was needed  "to save jobs, protect rights of small business owners and do its part to help the U.S. auto industry and economy get back on firm ground."

This legislation builds on the bipartisan letter signed by over 100 members of Congress last month mailed to Steven Rattner, senior advisor on auto issues at the Treasury Department. With time of the essence, the plan with HR 2743 is to garner numerous co-sponsors in the House so it arrives in the Senate with enough momentum to pass Congress and go to the president. 

Dealer association leaders from the National Automobile Dealers Association, Maryland Automobile Dealers Association, Virginia Automobile Dealers Association and the Washington Area New Automobile Dealers Association will be in attendance at the press conference along with other dealers from across the region and the U.S. at large.  For more information, contact Bridgett Frey in Rep. Van Hollen's office at (202) 225-5384.