Van Hollen: GM, Chrysler efforts on dealers 'fall far short'

General Motors and Chrysler are clashing with senior House Democrats over plans announced Thursday on how to close thousands of auto dealerships.

The two car companies, which have received tens of billions of dollars in government bailout money, unveiled plans to review and reconsider dealership closings. The companies said this year that they were planning to close more than 2,000 dealerships.

ADVERTISEMENT
GM said its plan, after extensive discussions with congressional lawmakers, includes face-to-face reviews with auto dealerships and a binding arbitration process. The company said that process will likely result in some dealerships being reinstated.

But the efforts were met with a strong criticism among senior House Democrats.

Rep. Chris Van Hollen (D-Md.) said the plans "fall far short of what is needed.

"I intend to redouble my efforts to enact legislation that will give auto dealers a fair and reasonable opportunity to get back into business, put people back to work, and help pump money back into America's car companies," he said.

The House passed a bill earlier this year forcing the car companies to restore dealerships, but the measure never moved forward in the Senate. The Obama administration said in July that it "strongly opposes" the effort, arguing that the dealership closings are central to the automakers' ability to restructure.

However, a senior Democratic aide said on Thursday that "legislative action is likely unless the companies offer a more comprehensive arbitration process."

GM said it would only go forward with its plan so long as Congress does not pass additional legislation on the issue.

"GM will begin to implement this plan in mid-January provided that legislation related to GM's dealer restructuring does not move forward," the company said in a statement.

Katie Grant, spokeswoman for House Majority Leader Steny Hoyer (D-Md.), said that the arbitration process in the plan should be revamped.

"Arbitration must allow for consideration of all information that dealers and the company want to present and not be limited to a narrow set of criteria that predetermines the outcome," Grant said.