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Lawmakers Reach Dealer Arbitration Compromise

Bill could offer reprieve to thousands of GM, Chrysler dealers.

by on Dec.09, 2009

Asst. Senate Majority Leader Dick Durbin has helped craft a compromise that could give a reprieve to some of the thousands of dealersv GM and Chrysler want to cut.

Asst. Senate Majority Leader Dick Durbin has helped craft a compromise that could give a reprieve to some of the thousands of dealersv GM and Chrysler want to cut.

Federal lawmakers have reached a compromise on a measure that could provide a reprieve for some of the thousands of dealers cut by General Motors and Chrysler as part of their bankruptcy reorganizations.

The two companies collectively cut more than 2,100 retailers, asserting that they needed to streamline their distribution systems and focus on high-volume showrooms that generated solid marks for customer satisfaction.  But those moves generated an immediate backlash among dealers, who make up of the most politically powerful lobbying forces in the country.

The new measure, which would require arbitrators to balance the economic interests of dealers, the two carmakers and the public, has been endorsed by both House Majority Leader Steny Hoyer, D-Md., and Assistant Senate Majority Leader Dick Durbin, D-Ill.

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“Closed dealerships across the country deserve a transparent review of their termination and the right to get back in business if they were terminated on faulty grounds,” said Durbin, adding, “GM and Chrysler have the right to determine the size and scope of their business. But Congress has a responsibility to protect taxpayer’s money when addressing the future of companies like GM and Chrysler.”

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