BILL OUTLINES STEPS FOR DUE PROCESS AND FAIRNESS FOR THESE DEALERSHIPS

Washington, Jun 25, 2009 - “General Motors and Chrysler have announced their intention to end their relationships with thousands of auto dealerships throughout the nation,” stated Rep. Cliff Stearns (R-Sixth). “Many of these dealerships are profitable, providing jobs and tax revenues in their communities. In addition, there has been no transparency in the arbitrary process for selecting the dealerships for closure.”

Stearns is supporting H.R. 2743, the Automobile Dealer Economic Rights Restoration Act, which would preserve General Motors and Chrysler car dealers’ rights for recourse under state law. Chrysler gave 800 dealers less than one month to clear their inventories and wind down operations. General Motors, itself now in government-induced bankruptcy and moving toward a future as a state-owned enterprise, will eventually close more than 2,000. There was no transparency to these decisions, and the announcements lacked any proof from the automakers that these closings would actually benefit them financially. Explained Stearns, “Reducing the number of dealerships is designed to reduce competition and choice, while increasing the cost of vehicles to boost the automakers’ bottom line using taxpayer money. That’s what is happening, but these dealerships are significant sources of jobs, employing more than 1.1 million people, and we need to treat them fairly.”

Added Stearns, “As in any business that has been in the family for many years, it is a travesty to eliminate these franchises without a due-process hearing, or recourse, or for a transition period to settle their financial situation. Many of these dealerships were given to other franchises within the same location without any explanation. This is wrong.”