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War on carmakers?Lawmakers attempt to protect dealers, but carmaker says the industry is being unfairly targetedPeter Marcus, DDN Staff WriterMonday, February 22, 2010 | |
A once under-the-radar piece of legislation that would allow ousted car dealerships to reopen despite being terminated by their respective manufacturers is fueling controversy.
An early morning news conference Friday brought House Bill 1049 to light, and an ad campaign launched Friday by General Motors Corp. in opposition to the legislation is sure to only add to the controversy.
The bipartisan legislation — sponsored by Reps. Joe Rice, D-Littleton, and Marsha Looper, R-El Paso, in the House and Sens. Chris Romer, D-Denver, and Shawn Mitchell, R-Broomfield, in the Senate — has already quickly made its way through the House on a 60-5 vote. The bill is scheduled to be heard by the Senate Business, Labor & Technology Committee next Monday.
The origin of the bill comes from the frustration of 39 car dealerships that were terminated in Colorado as a result of the bankruptcy restructuring plans of Chrysler, LLC and GM. Lawmakers and the dealers say now that the two auto manufacturers have partially emerged from bankruptcy, GM is attempting to reopen dealerships in Colorado with new owners, some with out-of-state investors.
Lawmakers have responded with legislation that would require manufacturers to provide dealers with a first right of refusal should the manufacturer decide to reopen a terminated dealership in the same market area. The legislation would also require carmakers to reimburse dealers for facility upgrades that were made in the past five years.
Proponents of the bill point out that taxpayers funded an $82-billion bailout of Chrysler and GM, of which taxpayers are expected to lose $30 billion. They find it “shameful” and “appalling” that GM has launched an estimated $60,000 advertising campaign against the bill. The ads will appear on Colorado stations and in newspapers, according to the corporation.
“It’s appalling that General Motors is using taxpayer dollars to buy newspaper and radio ads to oppose the very dealers who have loyally supported GM and their brands for generations,” said Senate Majority Leader John Morse, D-Colorado Springs.
The ads launched by GM state, “We must keep driving forward to repay our government loans. Don’t let special interests stick taxpayers in reverse.”
GM spokesman Greg Martin said HB 1049 “places special dealer interests above the taxpayers and consumers.”
“At the new GM, nothing is more important than repaying our taxpayer loans. We are working hard every day to achieve this goal,” Martin said in a prepared statement. “HB 1049 is a bad bill that will threaten our progress. This legislation will create special rights for underperforming dealerships and micromanage our dealership network to the detriment of taxpayers, our customers and the thousands of well-run dealerships that remain a part of the GM family.”
GM argues that the dealerships that were terminated in Colorado were not profitable and therefore a detriment to the corporation. The company worries that Colorado could set a “dangerous precedent” for the rest of the nation with HB 1049 that could “reverse the progress we’re making inside the company,” said Martin.
But as Melissa Kuipers, vice president of government relations for the Colorado Automobile Dealers Association, points out, it was Chrysler and GM that fell into bankruptcy, not the dealers themselves.
“It is just plain wrong that these out-of-state manufacturers cut 39 hometown dealers during their bankruptcy proceedings, only to then turn around and reallocate those very franchises to new dealers,” said Kuipers. “The local dealers weren’t the ones who were in bankruptcy.”
Senate President Brandon Shaffer has sent a letter to Gov. Bill Ritter asking for the governor to join the Legislature in support of the legislation.
A spokesman for Ritter could not immediately reach the governor on Friday.
Shaffer is shocked that GM is fighting the legislation with an expensive advertising campaign.
“This attempt by General Motors to deceive the citizens of Colorado is shameful,” he said. “GM is attempting to undermine this common sense legislation that protects Colorado’s locally-owned auto dealers.”
| Comments: |
| @ 2010-02-22 11:37:12 | |
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| Report Maker @ 2010-02-23 14:04:03 | Colorado should be commended for protecting there dealers who have commited millions to supporting General Motors and Chrysler vehicles. The manufacturer has very little cost it servicing addtional dealerships. It was just a quick way for them to circumvent the dealership agreements. Then give the new points to there friends. |
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| chartguy @ 2010-02-25 13:58:50 | The dealers had a franchise. GM confiscated it, and now is going to sell it to someone else. That's wrong. |
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| chartguy @ 2010-02-25 13:59:05 | The dealers had a franchise. GM confiscated it, and now is going to sell it to someone else. That's wrong. |
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