Legislating the Reinstatement of Terminated Auto Dealers

According to a U.S. senator, General Motors executives have been pressuring individual car dealers to oppose legislation aimed at restoring their terminated franchise agreements and rights.

“Some dealers fear that GM could take action against them if they do not sign a letter of opposition to the bill." -Senator Charles Grassley, R-Iowa, AutoNews (reg req)

What the auto dealerships are allegedly being strong armed to resist is S 1304 and HR 2743, federal bills attempting to undo the bankruptcy court mechanisms by which auto dealers were recently terminated by GM and Chrysler. These proposed legislations are dead in the water, as well they should be. The world has changed, and the pressures are too severe for Congressional revisionist history.

The terminated dealers are wealthy. They can afford to get together a war chest to fund Congressional theater about how awful it was for them to have been terminated and how wonderful it would be to serve ultimate fairness by restoring them to their former status as authorized dealers. But it is only theater. Remember the LaFalce hearings years ago about prohibiting franchise abuses – the so called Small Business Franchise Act?

The manufacturers, especially GM, are responding with strength in opposition, pressuring the surviving dealers to write in opposition to the bill – as if pressure were needed. The surviving dealers are all too thrilled to see the demise of dealer proliferation in their brands and localities. The new GM will have fewer brands, fewer plants and fewer workers. The number of U.S. executives will be cut by 35 percent. But as important as this shrinking, Henderson said, is the need to transform the automaker's culture, long criticized as insular and sluggish. Once the world's largest automaker, GM has been losing market share for decades. "It is a new era, and everyone associated with the company must realize this and be prepared to change, and fast," Henderson said.- WaPo

Much is being spoken about cultural changers in the new auto manufacturing companies. Gimme a break, please! Auto companies have been sending their lobbyists around to threaten dealers about anything and everything since time began. Some of the quotes in the 1956 O’Mahoney hearings, and from the Supreme Court in Justice Fortas’ maiden opinion in the GM Los Angeles County Dealers’ Discount house cases (dealers showing cars at discount houses off dealership premises with “irregular” discounts) will easily confirm that there have been no cultural changes in any auto company this year, no matter what the hype may say.

The supposedly post bankruptcy cars and trucks in dealer showrooms were placed into the production stream three years ago. These vehicles are not new concept new manufacturing technique vehicles, and the culture is not different than the culture was years ago.

Le plus ca change, le plus c’est la meme chose!