Van Hollen, Hoyer, Maffei, Kratovil And Bartlett Discuss Automobile Dealer Economic Rights Restoration Act Of 2009

Press Release

Today, Congressman Chris Van Hollen, Assistant to the Speaker, Congressman Steny Hoyer , Majority Leader, Congressman Dan Maffei , Congressman Frank Kratovil and Congressman Roscoe Bartlett joined auto dealership owners to discuss the recently introduced Automobile Dealer Economic Rights Restoration Act of 2009. The legislation will restore the economic rights of automobile dealers in order to protect jobs, workers, and small business owners.

"There is no question we need to assist in the restructuring of the American auto industry. But we can't help the car makers if we shut down the profitable auto dealers who sell their cars. Local car dealerships employ hundreds of thousands of Americans, contribute to vibrant local economies all across our country, and are key to putting the American auto industry back on top," said Van Hollen. "With this legislation we are allowing the market to do what it does best - determine which dealerships should remain open and which must close."

"The bill introduced by Congressmen Maffei and Kratovil defends our nation's auto dealerships from being arbitrarily closed," said House Majority Leader Steny Hoyer. "So far, there seems to be no evidence that closing profitable dealerships will save the automakers any money, while it would result in thousands of lost jobs at a time our economy can't afford it. Government has no interest in making day-to-day decisions for the automakers, and we are not asking for certain dealerships to remain open. This legislation says that the dealers' contracts should be honored, and any closings should be done in accordance with those contracts and state law."

"We all recognize that the economy is not favorable to the auto industry right now: we have already seen layoffs from manufacturers and we expect to see many dealerships consolidate and close this year," said Maffei. "However, forced, arbitrary closure of dealers by manufactures will not necessarily be financially beneficial to automakers, and it certainly will not help the local economies where dealers are integral to the business community. These dealerships employ hundreds of people across my district in good-paying jobs, they sponsor our little league teams and our pancake breakfasts, they have been a cornerstone of our community for generations -- and we are asking that they be allowed to make the best decisions possible for their employees and businesses."

"Driving up and down Route 50 in Maryland, the landscape is dotted with car dealerships that have locked their doors and emptied their lots," said Congressman Kratovil. "Each one represents dozens of employees left without income or health care, and a major hit to the local economies of these towns. This bill throws the dealers, their employees, and many communities a lifeline by allowing dealerships to keep their doors at their discretion and according to contractual obligations. At a time when our nation is reeling from the loss of hundreds of thousands of jobs each month we can't make the problem worse by forcing hundreds more dealerships to shut their doors. Any dealership that is willing and able to fight through this economic gloom deserves a chance to do so. This bill won't give auto dealers a handout or a bailout -- it will give them a fair shot to survive or fail in the marketplace. That's something every small business deserves."

Rep. Roscoe Bartlett said, "Ronald Reagan said, ‘there's no limit to what can be accomplished if you don't care who gets the credit.' Swift approval of this bipartisan bill will ensure the Rule of Law prevails to protect the private property rights of auto dealers. The auto dealerships targeted for closing are all independently-owned and operated small businesses and pillars of our communities. These men and women deserve better than these capricious closings and specious claims that eliminating or alienating their best customers will help Chrysler or GM, our economy, consumers or taxpayers."

The Automobile Dealer Economic Rights Restoration Act of 2009 would do the following:

Restore the economic rights of General Motors and Chrysler car dealers as they existed prior to each company's bankruptcies.

Preserve General Motors and Chrysler car dealers' rights to recourse under state law.

At the request of an automobile dealer, require General Motors and Chrysler to reinstate franchise agreements in effect prior to each company's bankruptcies.

Make clear that the legislation is not intended to make null and void the court-ordered transfer of assets from Chrysler LLC to New CarCo Acquisition LLC or the transfer of General Motors assets that could be approved by a court after the introduction of the Act.

This builds on the bi-partisan letter signed by over 100 members of Congress, including Congressmen Chris Van Hollen and Steny Hoyer, that was sent to the President on Monday and a letter that was mailed on May 15th to Steven Rattner, Senior Advisor on Auto Issues at the Treasury Department.

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