Chrysler Group and GM Co. look to cut dealer deal

America’s newest automakers, Chrysler Group and General Motors Company, are busy on Capitol Hill these days, hoping to derail legislation that would “un-terminate” dealers the companies shed while in bankruptcy.

John Bozella, a spokesman for Chrysler Group, said the company is open to a “non-legislative solution” but added there weren’t any specific proposals at this time.

Bills that would restore the former dealers to their pre-bankruptcy standing are under consideration in both the House of Representatives and the Senate. The House bill has strong bipartisan support and already has enough sponsors and co-sponsors to ensure passage. Members of Congress are also confident the White House would be willing to bargain on the issue. The proposed legislation would force Chrysler and GM to pursue dealer terminations through the state courts where dealers have a significantly stronger standing due to protective state laws. If passed, the legislation would impose significant burdens on the automakers.

The situation for Chrysler and GM is complicated by the fact the National Automobile Dealers Association (NADA) is strongly behind a legislative solution and does not want to see a negotiated settlement.

“We’re pursuing the legislation to its logical end, which is passage and signing by the president,” said Bailey Wood, a NADA spokesman. “There’s absolutely no reason for us to make a deal.”

Chrysler has already cut 789 dealers and GM is in the process of trimming about 2,000 from its ranks.

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