Kratovil Auto Dealer Update

Reps. Kratovil, Hoyer, Van Hollen, Maffei and Sen. Durbin, Discuss Plan to Resolve Disputes with Terminated Auto Dealers

Washington, DC – Today, Congressman Chris Van Hollen (D-MD), House Majority Leader Steny H. Hoyer (D-MD), Assistant Senate Majority Leader Dick Durbin (D-IL), Congressman Frank Kratovil (D-MD), and Congressman Dan Maffei (D-NY) held a press conference call to discuss new legislative language to address the ongoing dispute between GM, Chrysler and dealerships that were closed during the companies’ restructuring. This language was included in the Consolidated Appropriations Act, which passed the House today.

“This is a fair agreement that protects the rights of both parties,” said Congressman Kratovil. “Each dealership represents dozens of employees left without income or health care, and a major hit to the economies of small communities. At a time when our nation is reeling from the loss of hundreds of thousands of jobs each month this language protects jobs by instituting a fair process instead of forcing hundreds more dealerships to shut their doors without recourse. This gives auto dealers a fair shot to survive or fail in the marketplace. That's something every small business deserves.”

“Today’s action puts in place a transparent process that puts both auto dealers and auto companies on a more level playing field,” said House Majority Leader Hoyer. “We believe this is a compromise that is fair to both sides, allowing each to present its case before an independent arbitrator who can give a considered and binding determination. Having a successful auto industry and a profitable and competitive network of dealerships is in the best interest of our nation and consumers, and the legislation passed today moves us toward that goal.”

“I am very pleased that language has been included in the Consolidated Appropriations Act that will give terminated automobile dealers a fair and reasonable shot at getting back into business,” said Congressman Van Hollen. “Profitable car dealers should have never been terminated in the first place, and I was proud to join the fight to have these short-sighted decisions reversed. Automobile manufacturers won’t be able to get back on their feet without a strong dealer network, and Congress is committed to ensuring that such a network exists.”

“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. 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,” Senator Durbin said. “The compromise we announced today is balanced and responsible. It allows closed dealerships to enter binding arbitration to review their termination, but requires the arbitrator to take the economic interests of the dealership, the company and the general public into account when considering dealer reinstatement.”

Congressman Maffei said, “I commend GM and Chrysler for working with us to resolve this issue. While their proposals were steps in the right direction, they did not go far enough. This Congressional action restores transparency and ensures a fair process for all those involved. We do not want to hurt the auto manufacturers in their restructuring efforts moving forward, but auto dealers are a big part of our local communities and national economy, and they should be treated fairly.”

The Committee to Restore Dealer Rights, the National Automobile Dealers Association, the National Association of Minority Automobile Dealers, and the Automobile Trade Association Executives has endorsed the new language.