Despite General Motors and Chrysler announcing comprehensive plans to resolve concerns by dealers who were cut or are winding down, the National Automobile Dealers Association (NADA) continued this week to pursue legislation to reverse dealer terminations.
Last Thursday, Chrysler announced that it planned to institute binding arbitration for rejected dealerships. General Motors made a similar announcement the same day, and said it would begin to implement its plan in mid-January provided that legislation related to GM’s dealer restructuring does not move forward.
The NADA responded shortly thereafter, and said it would continue to pursue legislation to restore dealer rights as it maintains talks with the two automakers.
Yesterday, the association said discussions with House leadership and the House Judiciary Committee intensified over the weekend with regard to revisions to an amendment, sponsored by Rep. Steve LaTourette (R-Ohio), on the Financial Services appropriations bill. If successful, the revised amendment, which was unveiled today, would give shut-down dealers the right to arbitration, but it would not provide compensation for affected dealers.
General Motors officials said last week that the company’s plan offers a more certain and timely process than the legislation being considered. Officials added that the plan provides complete transparency, face-to-face reviews and binding arbitration, which, together, they said will result in dealers being reinstated.
GMAC Financial Services is also helping dealerships that are currently winding down their franchises by providing inventory financing for non-GM, used-vehicle stores. A company spokesperson told Automotive News that it is helping dealers in good standing with the company to transition to a different brand or to a used-only dealership.
The NADA so far supports the bill crafted by House leaders over the weekend, which is being sent to the Senate for consideration. The hope is to have the final spending measure and the attached agreement on President Obama’s desk by the Christmas recess. Aside from providing third-party arbitration, the bill directs arbitrators to consider a dealer’s past performance and current economic viability. The arbitrator will also consider a dealership’s demographics and geographic location.
“The revise amendment would give affected dealers transparency and the right to arbitrate,” read a statement from the NADA. “The arbitrator would balance the interests of the dealer, the manufacturer and the general public. The revisions reflect the goals pursued by the NADA for the past several months on dealer rights.”
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