NADA, dealers reach reinstatement compromise

The National Automobile Dealers Association and a group of dealers, called the Committee to Restore Dealer Rights, whose franchises were terminated by Chrysler and General Motors have reached an agreement on recommended reinstatement procedures.

The compromise agreement calls for the automakers to disclose the actual criteria used to determine which dealers were to be terminated. If Chrysler Group LLC and General Motors Company, the new entities created to continue production, agree, any dealers that could show their franchises were wrongfully terminated would be automatically reinstated.

Dealers not qualifying for automatic reinstatement could appeal to an arbitration panel consisting of one representative from the car company, one representative from the terminated dealer and a third member agreed upon by both parties. The panel would operate according to the rules of the American Arbitration Association and the Federal Arbitration Act and its decision would be binding on both parties.

The compromise gives the NADA and the dealers a common position. Previously, the NADA had said it would only seek the reinstatement of dealers wrongfully terminated under the automakers’ own criteria while dealers were pushing for arbitration.

Maryland dealer Jack Fitzgerald, a member of the Committee to Restore Dealer Rights, says the next step is persuading the automakers to come to the table. Fitzgerald noted, “All we’ve done is agreed to be on the same page with each other.”

GM says it has already offered dealers an opportunity to bid on new franchises., Chrysler did not have a comment.