U.S. House Passes Bill That Could Force GM and Chrysler to Reopen Closed Dealers

The U.S. House approved a plan that will force GM and Chrysler to renew agreements with the dealers that were unexpectedly closed during their bankruptcy proceedings. The bill that is opposed by Barack Obama passed 219 to 208 yesterday and would require the automakers to restore franchise agreements with the dealers in order to get future government aid. U.S. lawmakers feel that the automakers terminated dealerships with little notice or explanation.

“There is so much confusion about how they went about it,” House Appropriations Committee Chairman David Obey, a Wisconsin Democrat, said before the vote. He pointed to a dealer in his district who he said “runs a good business.”

“I do not, for the life of me, understand why he would be knocked off,” Obey said. Lawmakers “are trying to send a message they want clearer decision-making in terms of who got weeded out and who didn’t.”

It’s unclear how the Senate will vote on the bill although the Obama administration “strongly opposes” the bill. “The decision by Chrysler and GM to rationalize their dealer networks was a critical part of their overall restructuring to achieve long-term viability,” the administration said in a statement.

Full Story: Bloomberg