Smith Cosponsors Legislation To Halt Auto Dealer Closings

Press Release

Smith Cosponsors Legislation To Halt Auto Dealer Closings

Rep. Adrian Smith (R-NE) announced today his support for H.R. 2743, the Automobile Dealer Economic Rights Restoration Act of 2009, requiring Chrysler and General Motors to honor their commitments to dealerships throughout the country.

About 22,000 Nebraskans are employed in jobs related to auto manufacturing and sales.

The bipartisan legislation requires auto manufacturers in which the federal government has ownership interest - or to which the federal government is a lender - to continue to honor their commitment and not deprive economic rights to the dealers.

When notified their relationship with their parent companies was ending, Chrysler and GM dealerships nationwide were left with millions of dollars invested in car stock, with no options for consolidation and little leverage for liquidation.

The legislation would restore the economic rights of GM and Chrysler car dealers as they existed prior to each company's bankruptcy. It would also preserve car dealers' rights to recourse under state law, and require - at the request of an auto dealer - GM and Chrysler to reinstate franchise agreements in effect prior to each company's bankruptcy.

"Thousands of auto dealers throughout our country were shocked when they found out their relationship with GM or Chrysler was ending - seemingly without rhyme or reason. These dealerships have made significant contributions to their communities and deserve better than just an arbitrary notification," Smith said.

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