Kratovil Sponsors Pay-Up Bill For Closing Dealerships

First District Democratic Congressman Frank Kratovil is co-sponsoring a bill that would make General Motors and Chrysler honor their commitments to auto dealers who they recently notified they would stop working with. Chrysler announced several weeks ago the termination of 789 of its dealers, which is about 25 percent of its national dealers. GM, which like Chrysler has filed for bankruptcy, also announced they will not renew about 2,500 dealer contracts beginning in October 2010. None of the dealerships with whom Chrysler is terminating its relationship are on the Mid-Shore; GM has not yet identified its affected dealers.

The Automobile Dealer Economic Rights Restoration Act of 2009 requires auto manufacturers in which the federal government has invested taxpayer dollars to continue to honor commitments and not deprive economic rights to the dealers. The federal government has thus far invested tens of billions of dollars in the manufacturers. According to a press release from Kratovil’s office, the dealers selected by GM and Chrysler would be left with millions of dollars invested in car stock, no options for consolidation and little leverage for liquidation. The aim of the bill is to protect small business owners, employees, and workers and communities that are invested in the dealerships.

Comments