Bill to undo key part of GM and Chrysler deal gains majority in House

A bill to undo a critical component of the Obama administration's bid to restructure both General Motors and Chrysler through bankruptcy has now gained a majority of supporters in the House.

The Automobile Dealer Economic Rights Restoration Act has now secured 221 cosponsors in addition to Rep. Dan Maffei (D-N.Y.), who introduced the bill.

The legislation would force GM and Chrysler to restore auto dealers' franchise rights if the dealer requests such a thing. In essence, the bill could reopen as many as 789 Chrysler dealers and 1,300 GM dealerships each company had to close as part of the cuts leading to their bankruptcy proceedings.

Those filings were organized by the Obama administration and its auto task force, setting up a potential conflict between a normally friendly Congress and the White House.

It also pits the automakers against their onetime dealers.

"This legislation, if passed, would put our long-term viability at risk," GM spokesman Greg Martin told the Detroit Free Press.

An association of former dealers, meanwhile, praised the bill.

"A majority of the US House of Representatives, an astonishing 222 Members, and a quickly growing number in the Senate, from both parties, now fully recognize what is clear to the American people: the leadership of GM and Chrysler made a horrible mistake by their arbitrary termination of profitable dealerships," said Jack Fitzgerald and Alan Spitzer, the co-chairmen of the Committee to Restore Dealer Rights.

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