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Majority of House supports bill to reverse dealer closings

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Majority of House supports bill to reverse dealer closings

David Shepardson / Detroit News Washington Bureau

Washington -- A majority of House members have signed onto a bill to reverse the closing of 789 Chrysler dealerships and block General Motors Corp. from closing more than 1,300, while the full House could vote on the bill as early as next week.

The Automobile Dealer Economic Rights Restoration Act of 2009, sponsored by Rep. Daniel Maffei, D-N.Y., now has 221 cosponsors -- a majority of the 435-member House. GM's executives met with Maffei this week.

On Wednesday, the bill had just 202 cosponsors. Late Tuesday, the House Appropriations Committee approved by a voice vote an amendment that also seeks to reverse the dealer closings.

GM's vice president for sales, service and marketing, Mark LaNeve, said he and his boss, GM North American President Troy Clarke, met with more than 20 members of Congress over the last two days. LaNeve said GM, in the second quarter of 2010, will take another look at its closing dealers to reconsider some if the market or GM's sales improve.

"This has been the most difficult, hard thing I'd every have to do," LaNeve said. "In terms of creating a viable, competitive GM on taxpayer dollars, you can't look in the mirror and say we didn't have to restructure the dealer body."

The bill would require GM and Chrysler to "honor those rights ... prior to the commencement of the bankruptcy cases of each corporation, including dealer rights to recourse under state law." Chrysler's 789 dealers, nearly a quarter of its network, closed in early June.

GM sent termination notices to about 1,300 dealers and expects another 1,280 to close voluntarily by the end of 2010. GM is giving closing dealers 16 months to sell their inventory and up to $1 million in wind-down payments and has agreed to hear appeals. It has reversed its closing decisions in at least 70 instances, LaNeve said -- saying the decisions were driven by data or "extraordinary circumstances." "We didn't reverse anybody because they said they would do better in the future," LaNeve said.

Chrysler offered no appeal process and no money to closing dealers. It gave dealers just 26 days to close their doors.

On Thursday, Chrysler defended its actions, saying it had "used sound business judgment during the bankruptcy process to determine the appropriate size for its dealer network. Annual new vehicle sales have declined roughly 40 percent in the last two years, which leaves Chrysler at a level that cannot support the previous size dealer network."

But Chrysler said it is still talking to its former dealers.

"Chrysler continues to work with discontinued dealers on issues related to redistribution of inventory, parts and special tools," the company said. The closings, it said, were "tough, painful business decisions to be made, including reducing the number of manufacturing facilities, employees and dealers. These decisions were not taken lightly, nor were they made irrationally."

Chrysler said the bill with 222 supporters "would jeopardize the viability of the new company."

Rep. Gary Peters, D-Bloomfield Township, is circulating a letter trying to broker a compromise.

"Those of us from states that have a significant auto presence have always understood that auto restructuring will only be possible through shared sacrifice among all stakeholders," Peters wrote. "We fully support efforts to provide assistance to automobile dealerships whose franchise agreements are being shed as part of the bankruptcy process. The owners and employees of the dealerships affected by this decision were not responsible for the financial crisis that has necessitated automobile restructuring, and neither are the thousands of hourly and salaried workers who are being laid off, the retirees whose benefits are going to be cut or the auto parts suppliers who are going out of business."

An ad-hoc committee of auto dealers -- co-chaired by Jack Fitzgerald, owner of Fitzgerald Auto Malls in Maryland, Pennsylvania and Florida; Alan Spitzer, president of Spitzer Management Inc. with dealerships in Ohio, Pennsylvania and Florida; and Tammy Darvish, vice president of DARCARS in Maryland -- issued a statement praising the legislation.

"A majority of the U.S. House of Representatives, an astonishing 222 members, and a quickly growing number in the Senate, from both parties, now fully recognize what is clear to the American people: The leadership of GM and Chrysler made a horrible mistake by their arbitrary termination of profitable dealerships," the statement said. "Detroit and the (White House's) auto task force's flawed business plan will lead to the direct loss of more than 169,000 good jobs and cripple the U.S. auto industry's ability to come back from bankruptcy."

A Senate version sponsored by Sen. Charles Grassley, R-Iowa, has 14 cosponsors, including Edward Kennedy, D-Mass.; Tom Harkin, D-Iowa; and Robert Bennett, R-Utah.

More than 100 auto dealers from across the country will join with senior members of Congress on Tuesday July 14 on Capitol Hill to make their case for immediate passage of the bill.

Clarke and LaNeve, will meet with Senate aides this afternoon after a day of meetings Wednesday.

Chrysler Deputy CEO Jim Press also has been meeting with key officials on the Hill.

Two top White House auto advisors, Steve Rattner and Brian Deese, met with House Majority Leader Steny Hoyer and GM and Chrysler executives for nearly 90 minutes Wednesday in an effort to reach a deal to head off legislation.

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The leadership of GM and Chrysler made a horrible mistake by their arbitrary termination of profitable dealerships,"

Yes, Congress is qualified to evaluate business decisions of profit-maximizing firms. I'm sure GM was just being mean and its executives were probably drunk when they made their decision to stick it to the working man. If this passes, God help us all.

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Well since Biden is Vice President and from Delaware, maybe I should write him and ask him to spare the Wilmington plant too, since the US Government is now the majority owner of GM.

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Close the dealers down. This bill will never make it past the senate or past a presidential veto. What a waste of time.

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This is just human stupidity at it's worst.

Why should Chryco or GM be forced to sell their product through any dealer they don't want to?

Subway sets standards for its franchises...if we let Subway make its own mind up about a sandwich...shouldn't GM and Chryco be able to make their own minds up about who they let sell their cars?

Chris

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This is just human stupidity at it's worst.

Why should Chryco or GM be forced to sell their product through any dealer they don't want to?

Subway sets standards for its franchises...if we let Subway make its own mind up about a sandwich...shouldn't GM and Chryco be able to make their own minds up about who they let sell their cars?

Chris

Ewwww, I don't eat at Subway, it's just nasty ...

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Subway is delicious if you stay away from the "hot" subs. Cold subs are g reat...love the breads too, especially the Honey Oat and the Italian Herbs and cheese.

The hot subs are no good though. They just toss cold, pre cooked food in the microwave. For hot subs I love Quiznos.

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Subway is delicious if you stay away from the "hot" subs. Cold subs are g reat...love the breads too, especially the Honey Oat and the Italian Herbs and cheese.

The hot subs are no good though. They just toss cold, pre cooked food in the microwave. For hot subs I love Quiznos.

What Subway do you go to? The hot subs are all oven-baked everywhere I go...hence "toasted."

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What Subway do you go to? The hot subs are all oven-baked everywhere I go...hence "toasted."

Well the ones I've been to, they toast it after they microwave the meat...not sure about steak but they do it for chicken. Either way it's pre-cooked, and I've don't care for it. Tried the chicken/bacon/ranch once...it was ok but I'll stick with my turkey/provolone/lettuce/chipotle southwest.

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Quizno's is excellent as well. I miss back in the way back when my wife and I were dating and she was living in Philly. Talk about SUBS...

People in Philly and Atlanta know how to eat.

Chris

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Well the ones I've been to, they toast it after they microwave the meat...not sure about steak but they do it for chicken. Either way it's pre-cooked, and I've don't care for it. Tried the chicken/bacon/ranch once...it was ok but I'll stick with my turkey/provolone/lettuce/chipotle southwest.

I don't eat chicken sandwiches unless the chicken has been deep-fried, so I don't know if that's how they do it out here or not, but every other sandwich (except maybe the veggie patty) gets toasted, meat included. Getting a "tuna melt" is actually halfway decent.

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Quizno's is excellent as well. I miss back in the way back when my wife and I were dating and she was living in Philly. Talk about SUBS...

People in Philly and Atlanta know how to eat.

Chris

I just can't get past the Cheez Whiz on those "Philly" cheesesteaks. Philly also has those god-awful "tasty cakes" that just taste like bread marinated in high-fructose corn syrup.

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I don't eat chicken sandwiches unless the chicken has been deep-fried, so I don't know if that's how they do it out here or not, but every other sandwich (except maybe the veggie patty) gets toasted, meat included. Getting a "tuna melt" is actually halfway decent.

I like grilled and fried chicken myself. The one I go to asks if people want the sub toasted or not. I love my subs toasted...nothing like warm bread, meat and melted cheese contrasting with crisp, cold lettuce and sauce!

I haven't had a tuna melt that I didn't make in a long time. I make mine. My favorite way to do it is use a skillet and warm up the cracked lemon pepper tuna fillets, provolone cheese, put it on Partisan bread and toast lightly.

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Back on topic...from what I've heard Chrysler and GM have/will cut under performing dealers that shouldn't be open in the first place. Even so, it doesn't make sense to have a down economy and auto market and such a huge glut of dealers.

Even in good times, Toyota manages just fine with far less than what GM has.

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There's political motivation afoot here, pure and simple. The only people to benefit from this are those where votes count.

Ding ding! We have a winner.

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I just can't get past the Cheez Whiz on those "Philly" cheesesteaks. Philly also has those god-awful "tasty cakes" that just taste like bread marinated in high-fructose corn syrup.

Ughhh...you haven't had a "real" philly cheese steak sandwich then.

Enough good cheese to give even Lance Armstrong hardened arteries...

Chris

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Back on topic...from what I've heard Chrysler and GM have/will cut under performing dealers that shouldn't be open in the first place. Even so, it doesn't make sense to have a down economy and auto market and such a huge glut of dealers. Even in good times, Toyota manages just fine with far less than what GM has.

And even then, I'd like to see them close Germain Toyota and Hatfield Toyota/Toyota West here in Columbus.

We have about eleventy billion times too many new car dealers.

Chris

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Ughhh...you haven't had a "real" philly cheese steak sandwich then.

Enough good cheese to give even Lance Armstrong hardened arteries...

Chris

I actually haven't had any cheesesteak. My best friend's from Philly, and he goes on and on about what makes a good cheesesteak, why I have to try one, etc. and yet...it's a $h! ton of cheese with some low-quality "steak" on a sub bun. Yeah, I think I'll pass.

And according to him, Cheez Whiz makes the cheesesteak...that's my only source of info here, some local of South Philly.

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I've never had cheez wiz...is anything in the ingredients even dairy?

It's plastic pretending to be cheese. It even comes in an aerosol can. So gross.

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I've never had cheez wiz...is anything in the ingredients even dairy?

Yeah there's dairy, but I eat the refrigerated stuff in a jar, so I can't speak for the aerosol. It's great on buttered baked potatoes, with sour cream and salsa.

Edited by Kix
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I actually haven't had any cheesesteak. My best friend's from Philly, and he goes on and on about what makes a good cheesesteak, why I have to try one, etc. and yet...it's a $h! ton of cheese with some low-quality "steak" on a sub bun. Yeah, I think I'll pass.

And according to him, Cheez Whiz makes the cheesesteak...that's my only source of info here, some local of South Philly.

I was just at the classic corner of 9th and Passyunk Thursday showing a NYer what a REAL Philly Cheesesteak is. Had a sample from both Pats and Genos. NYC "Philly Cheesesteak" places suck!

Granted, I still prefer my steak "provolone wit-out", I still like getting a "whiz wit-out" from time to time... they are good. And fast.

As far as Subway and Quiznos... screw 'em... SUPPORT YOUR LOCAL SUB/DELI SHOP!!! Years ago, in South Jersey there was a killer sub shop on every corner. Then Wawa came. I liked Wawa... they made a decent sub for a decent price... but they put almost all the sub and deli places out of business. Now that Wawa is the only game in town, the sub prices are through the roof and the ingredients are thin. The also only carry a handful of deli meats to slice because most of there deli meat is resliced from the factory. Ugh.

My father used to have a great nose for a good sub shop, and yet, I only know of 3 decent places in all of South Jersey... White House sub shop in AC (always packed to the roof), Crown market in Vineland and Sugar Hill subs in Mays Landing. Don't suffer like the people of South Jersey... save your local sub shops!

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[venting]When can we vote all these hypocritical bums out of office? It can't happen soon enough for me! All these stupid assholes couldn't wait to run GM and Chrysler into bankruptcy but once they are there, they want them to ignore all the bankruptcy rules or change them on the fly? So they had an "Ah ha! Oh $h!!" moment and realized the Big 3 really do affect their states and their constituents. Now we have to change the rules to minimize the impact or at least make our constituents think we are doing something for them. :angry:

Our Congress and Senate are worthless. The whole lot of them. I guess in the next election I will have to continue what I started in the last election... vote against every single incumbent.[/venting]

Okay, now that I am done venting: I think GM is handling it the best they possibly can. Chrysler, on the other hand, pretty much totally screwed the dealerships they shut down. I think what they did to those dealers was inexcusable giving them only 26 days. Still, they had the right to do it under the bankruptcy code and I don't believe in changing the rules in the middle of the game.

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Close the dealers down. This bill will never make it past the senate or past a presidential veto. What a waste of time.

Well if they get enough support then a president veto is what would be a waste of time.

Besides, i don't expect Obama to veto this, these are also votes for him at stake.

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