On July 6, GM auto dealers received an interesting letter from the General Motors National Dealer Council.  The letter informed them that the Council strongly opposes H.R. 2743, the Automobile Dealer Economic Rights Restoration Act of 2009.  This is the legislation that would protect the rights of the dealerships that had been arbitrarily closed or forced to discard portions of the business they worked so hard to build.

This letter urged the dealers to sign a sort of petition to Congress immediately; no later than 5:00 p.m. the very next day, Tuesday, July 7, saying that they, too, do not support passage of the bill.
 
I am a co-sponsor of H.R. 2473, along with 241 other Members of Congress.  If passed, it would essentially reinstate the economic and contract rights of dealers who were arbitrarily dropped by Chrysler and General Motors during their respective restructurings. If dealers were financially sound to stand on their own, they could continue to remain in business. And those that don’t would at least have legal grounds to recoup a portion of the value of their taken assets.  In essence, H.R. 2473 makes these dealers whole instead of allowing their livelihoods to be taken from them with no legal recourse and no financial compensation.

It is reprehensible for this company to ask their dealers to cannibalize one another under what can only be considered a veiled threat.  After all, if they don’t sign, what will happen to their dealership?  Will they suddenly get a pink slip, too?  Senator Chuck Grassley put it best in a letter to GM when he called this “strong-arming,” and asked GM to assure him “and hundreds of dealers who employ thousands of workers that you will not retaliate against them if they do not sign this letter or do not lobby against the bill on behalf of GM executives.”

Given that the federal government now owns 61% of GM, the moniker that many have given GM – Government Motors – seems apropos.   And, that makes this “strong-arming” even more reprehensible.   With government running GM and Chrysler, politics will control their decision-making, not sound business principles. This letter is proof-positive that politics is prevailing.

Here are a couple of recent clips addressing the GM closures on the House Floor: