Auto dealers seeking help from Congress
By LARRY RINGLER Tribune ChronicleCongress is set to approve an initiative begun by U.S. Rep. Steven C. LaTourette, R-Bainbridge, that may allow some closed auto dealers to reopen their doors.
The language was inserted into the Omnibus Appropriations Bill, which the House and Senate are expected to approve within the next several days, LaTourette said. The law provides auto dealers with an opportunity to appeal their closure to a third party for binding arbitration.
However, it's not expected to save standalone Pontiac dealers such as Jim Pace Pontiac in Niles because General Motors Corp. is phasing out the brand this year, leaving them with no vehicle lineup to sell.
The new law will allow auto dealers that had a franchise agreement with a covered manufacturer as of Oct. 3, 2008, to appeal their closure. The dealers have a right to accept binding arbitration. The arbitrator will be able to consider several factors, including profitability in 2006, 2007, 2008 and 2009, the dealership's current economic viability, and the demographic and geographic details of the dealership's territory.
''While the language we have been able to secure does not guarantee the reopening of these dealerships, I am hopeful that many of the hasty decisions the manufactures made in shutting down good businesses with outstanding workers can be reversed in this more deliberative arbitration process,'' LaTourette said, noting that nearly 200,000 jobs were at risk in the original closings.
GM and Chrysler announced the closure of more than 3,000 dealers as part of their bankruptcy restructuring plans last summer.
Chrysler decided to close 789 dealers and gave them just 26 days to shut down through a rapid-fire, government-run bankruptcy process. Only two states saw more Chrysler / Dodge / Jeep dealer closings than the 47 that closed in Ohio, LaTourette said. Dealers were given virtually no help by Chrysler, including no financial assistance to wind down their dealerships, he said.
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, LaTourette said.
