Majority of US House members support bill to reverse auto dealer closings
- Source: Xinhua
- [19:20 July 10 2009]
- Comments
A majority of US House members have signed onto a bill to reverse the closing of 789 Chrysler dealerships and block General Motors from closing more than 1,300 dealers, news reports said Thursday.
According to a Detroit News report, the full House could vote on the bill as early as next week.
The Automobile Dealer Economic Rights Restoration Act of 2009, sponsored by Rep. Daniel Maffei, now has 221 co-sponsors -- the majority of the 435-member House.
The bill would require GM and Chrysler to honor dealer rights before the bankruptcy cases of the corporations begin.
According to the report, Chrysler's 789 dealers, nearly a quarter of its network, closed in early June. Chrysler offered no appeals process and no money to closing dealers. It gave dealers just 26 days to close their doors.
Meanwhile, GM, which filed for Chapter 11 bankruptcy on June 1, sent termination notices to about 1,300 dealers and expects another 1,280 to close voluntarily by the end of 2010.
GM is giving closing dealers 16 months to sell their inventory and up to 1 million US dollars in wind-down payments. GM has also agreed to hear appeals.
On Thursday, Chrysler defended its actions, saying it had "used sound business judgment during the bankruptcy process to determine the appropriate size for its dealer network."
"Annual new vehicle sales have declined roughly 40 percent in the last two years, which leaves Chrysler at a level that cannot support the previous size of the dealer network."
It is reported that more than 100 auto dealers from across the country will join with senior members of the US Congress on Capitol Hill on July 14 to make their case for immediate passage of the bill.