GM, Chrysler, White House officials try to block House bill reversing planned shutdowns
Thursday, July 9, 2009
David Shepardson / Detroit News Washington Bureau
Washington — White House officials and executives from General Motors Corp. and Chrysler Group LLC met with a top congressional leader Wednesday to try to reach a deal to head off legislation that would restore the rights of dealers the automakers want to close.
GM’s North American chief Troy Clarke; Mark LaNeve, GM vice president for sales, service and marketing; Chrysler Deputy CEO Jim Press; and John Bozzella, Chrysler vice president for external affairs, met with House Majority Leader Steny Hoyer for nearly 90 minutes on Capitol Hill about the contentious issue.
Also attending was the White House’s top adviser on autos, Steve Rattner, as well as Brian Deese, another Obama administration auto adviser. A person familiar with the meeting said Hoyer urged the automakers to reach some agreement with angry dealers by late Friday to head off the legislation.
At issue is the companies’ decision to close nearly 3,000 dealers. Late Tuesday, the House Appropriations Committee approved an amendment that seeks to overturn those actions.
Katie Grant, a spokeswoman for Hoyer, said the lawmaker wants a “fair and transparent process” that protects strong-performing dealers to save jobs and “give our nation’s auto companies their best chance to succeed.”
U.S. Rep. Steven C. LaTourette, R-Ohio, said the legislation would “force Chrysler and GM to restore franchise agreements” that were killed in bankruptcy or ended by automakers.
The administration opposes Congress’ efforts to insert itself in the dealer closing controversy.
GM spokesman Greg Martin said the proposal “would put at risk our long-term viability.”
“Our restructuring, approved by the court, includes actions across all aspects of our business to become stronger and more competitive,” he said. “We need the right dealer network to match a reinvented company.”
Passed on a voice vote late Tuesday, the amendment to the Financial Services spending bill has the support of Rep. David Obey, D-Wis., the influential House Appropriations Committee chairman.
Another House proposal to hamstring GM’s plans to terminate agreements with nearly 1,400 dealers, and reopen 789 Chrysler dealers that closed last month, has 202 co-sponsors, including Hoyer, D-Md., and House Financial Services Committee Chairman Barney Frank, D-Mass.
Three Michigan Republicans — Thaddeus McCotter of Livonia, Pete Hoekstra of Holland and Vern Ehlers of Grand Rapids — have backed the bill. No Michigan Democrat has signed on. There are additional dealer bills in the House and Senate.
House Judiciary Committee Chairman John Conyers, a Detroit Democrat, has tentatively set a hearing on the dealer closings for July 22, with top executives from both automakers expected to testify.
Dealers plan to lobby Congress in favor of the bill Tuesday.
In addition to their meeting with Hoyer, GM’s LaNeve and Clarke met with several other lawmakers, including House Minority Whip Eric Cantor, R-Va. They are set to meet today with Senate chiefs of staff.
GM offered its closing dealers up to $1 million in wind-down payments, giving them 16 months to sell off their inventories if they agreed to close. It reversed the closing decisions on appeal in more than 60 cases.
Chrysler had no appeal process, gave dealers no cash payments to close and forced them to shut down 26 days after notification.
GM wants to trim its dealer network because its market share has fallen from just over 50 percent in the early 1960s to under 20 percent today. GM plans to close at least 58 in Michigan.
GM and Chrysler have come under withering criticism in Congress for their plans to close dealers.
GM notes that more than 99 percent of dealers who were offered new franchise agreements to remain with GM accepted, and more than 98 percent of those asked accepted wind-down agreements.
