Chrysler and GM Dealers Negotiate on Capitol Hill

Talks between the new Chrysler Group and General Motors Co. and dealer groups will begin soon in Washington, and will be led by House Majority Leader Steny Hoyer (D-MD), Senate Majority Whip Richard Durbin (D-IL) and Representative Chris Van Hollen (D-MD).

The parties are attempting to negotiate a solution to disputes that arose from the automakers’ closing of 2,100 dealerships this past year. They are also meant to halt legislation that would reverse the termination of 789 Chrysler dealerships and stop the closing of 1,350 GM dealerships next month. The legislation was passed by the House by stalled out in the Senate.

Dave Regan of the National Automobile Dealers Association says, “We appreciate the efforts from members of Congress to secure this important meeting, and we look forward to participating in these discussions.”

Representative Frank Kratovil (D-MD) has been working along with others to negotiate meetings between the dealer groups and the automakers. His spokesperson, Kevin Lawlor, says, “Congressman Kratovil is pleased that the process is moving along, and looks forward to final resolution.”

During the talks, staff for the lawmakers as well as members of the Obama administration will be present and participating.

What dealerships are looking for in the talks is the disclosure of the criteria used by Chrysler and GM to choose which dealerships to close. They would like any dealership exceeding these terms to be reopened, and any dealer who was denied reopening under these conditions to have the opportunity to go before an arbitration panel for appeal.

Also, according to the dealer proposal, the terminated dealerships would be paid $3,000 for each vehicle it sold in one of three years: 2006, 2007 or 2008. The choice of year would be up to the dealership.

Additionally, dealers whose doors were closed, and who choose to, could automatically receive a new franchise if he or she applies and qualifies for it.

Another point of contention for dealers is GM’s and Chrysler’s insertion of active dealers into areas that once belonged to the terminated dealers. This is a practice that both lawmakers and dealers want to see come to an end.

GM and Chrysler are not commenting on the meetings, and have been reticent as of late. Congressional members are urging the companies to come to the table for negotiations, saying that legislation will go forward if they don’t begin soon.

The first meeting is scheduled for Wednesday, September 30.

Posted in In the News

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