Bill to overturn dealer closings passes House vote

http://www.leftlanenews.com/bill-to-overturn-dealer-closings-passes-house-vote.html
Bill to overturn dealer closings passes House vote

A bill that seeks to overturn dealer closings at Chrysler and General Motors has passed the House and is now on its way to a Senate vote. The bill passed a House vote last night with a final tally of 219-208. Although the bill is now on to a Senate vote, it still faces heavy opposition, namely from the Obama administration.

If the bill is voted into law, Chrysler would have to reverse its decision to close 789 U.S. dealerships and GM would be forced to renew 1,300 franchise agreements recently earmarked for termination. Not surprisingly, both automakers oppose the measure.

“If Congress reverses this process, it flies in the face of a U.S. vehicle market that has declined 40 percent since 2007,” Chrysler Vice President Peter Grady said in a statement.
“Indeed, the U.S. dealer network was built to serve a market that once sold 16 million vehicles a year. Those days are gone.”

The Obama administration also opposes the bill as it will unravel bankruptcies at both automaker and billions in government funding. It remains to be seen if the bill has enough momentum to pass the Senate, but a vote is expected in the coming weeks.

As much as GM and Chrysler need to reduce dealers, if the closings were done without regard to bankruptcy laws, then I would support this bill (I don't know if they were or not). I think it's more important to ensure that established bankruptcy laws are followed in all cases, and can't be subverted by a presidental whim.

On the other hand, if the closings were done by the book, and this is just a case of congressmen trying go around the laws for sake of votes in their home riding, then this bill shouldn't pass.

On the other hand, if the closings were done by the book, and this is just a case of congressmen trying go around the laws for sake of votes in their home riding, then this bill shouldn't pass.

Thats exactly what it is. Its lead by a Senator from Ohio who had the most closings of all 50 states....atleast Chrysler dealers.

The closings were done by the book - but the book was rewritten right before the closings.

It's a double-edged sword...a catch-22. I despise gov't interference in private business, so my instinct is to oppose this bill without second thought. However, it was heavy gov't intervention that got all this going in the first place, so its a matter of "can two wrongs make a right in this case"?

They opened the can of worms....now those worms are crawling around in all kinds of cracks and crevices...

The closings were done by the book - but the book was rewritten right before the closings.

It's a double-edged sword...a catch-22. I despise gov't interference in private business, so my instinct is to oppose this bill without second thought. However, it was heavy gov't intervention that got all this going in the first place, so its a matter of "can two wrongs make a right in this case"?

They opened the can of worms....now those worms are crawling around in all kinds of cracks and crevices...

I agree completely here. Closing all of these dealerships certainly won't help unemployment numbers (if certain people in DC even care about that number) but at the same time, here we have more Gov't dictation in "private" business. It will be interesting to see how things play out.

Won't go into law. If it passes the Senate, Obama will veto it. They don't have enough votes to override the veto.

Won't go into law. If it passes the Senate, Obama will veto it. They don't have enough votes to override the veto.

Good point.

Somebody already said it, but the rules were changed in the middle of the game so they could do this. This seems to be an ongoing theme with this administration though.

I don't necessarily think that having all of these dealerships was the right business thing to do, but I also don't think that the way that the bankruptcy laws that had existed in this country for almost 100 years were pissed on in the process is something that should be tolerated.

My leanings to following the rule of law are more powerful than my belief in what may or may not be the correct business model for the current automotive landscape.

I'd love to see my home town dealership re-authorized to sell and service Chevys but this bill is clearly just pandering to constitutes. If it does pass can someone tell me how exactly it will hurt GM. It doesn't cost them anything, the dealer pays for just about everything.

Somebody already said it, but the rules were changed in the middle of the game so they could do this. This seems to be an ongoing theme with this administration though.


you are such a tool, do you even read the articles, or just immediately post your anti Obama troll posts?

here is another = GM, Chrysler, White House officials try to block House bill reversing planned shutdowns (http://www.detnews.com/article/20090709/AUTO01/907090414/1148/Dealer-closure-battle-rages)

This is a bipartisan bill with a lot of Republican support.

From my understanding, the closings were done outside of bankruptcy. But they could have been done in bankruptcy as well.

I hope this won't get passed. This is vote pandering.

somebody already said it, but the rules were changed in the middle of the game so they could do this. This seems to be an ongoing theme with this administration though.

I don't necessarily think that having all of these dealerships was the right business thing to do, but i also don't think that the way that the bankruptcy laws that had existed in this country for almost 100 years were pissed on in the process is something that should be tolerated.

My leanings to following the rule of law are more powerful than my belief in what may or may not be the correct business model for the current automotive landscape.

3.6.3.

This is a bipartisan bill with a lot of Republican support.

Correct. I think what he is saying is that IF the dealerships are being closed as a result of playing fast and loose with established bankruptcy law, the sponsors of the bill are doing the right thing by effectively blocking it with this legislation. Rule of law before what's best for business.

Whether or not that is actually the case, I do not know. I'm sure there are gray, debatable areas somewhere in this.

Correct. I think what he is saying is that IF the dealerships are being closed as a result of playing fast and loose with established bankruptcy law, the sponsors of the bill are doing the right thing by effectively blocking it with this legislation. Rule of law before what's best for business.

Whether or not that is actually the case, I do not know. I'm sure there are gray, debatable areas somewhere in this.

No, he is just our newest Troll.

you are such a tool, do you even read the articles, or just immediately post your anti Obama troll posts?

No, he is just our newest Troll.

:lol: Wow, reading comprehension owns you yet again!

And you accusing someone of being a troll is completely laughable considering half the threads you make. :lol:

:rolleyes:

I think what he is saying is that IF the dealerships are being closed as a result of playing fast and loose with established bankruptcy law, the sponsors of the bill are doing the right thing by effectively blocking it with this legislation. Rule of law before what's best for business.

Whether or not that is actually the case, I do not know. I'm sure there are gray, debatable areas somewhere in this.


And thank you. At least you're able to understand what is being written. :thumb: This guy is simply looking for any angle on me since I embarrassed him in the "NK missile" thread and the "defense spending chart" thread. :lol:

No, he is just our newest Troll.

He's allowed to have an opinion (as long as he doesn't cross a line with the mods).

Neither you nor I nor (likely) anyone else here is a bankruptcy attorney. Quite frankly I don't have the time or the sanity to dive too deep into researching what laws were bent or broken, if any. From what I can gather, there were some gray areas, as I mentioned before. I'd think that often times there WILL be gray areas in such an unprecidented filing.

Won't go into law. If it passes the Senate, Obama will veto it. They don't have enough votes to override the veto.

Absolutely agree!

All the politicos win. They can tell the home constituants the "We sure tried.." routine. Not only has the horse gotten out of the barn, that barn's burned down. You just have to love meaningless symbolism.

Absolutely agree!

All the politicos win. They can tell the home constituants the "We sure tried.." routine. Not only has the horse gotten out of the barn, that barn's burned down. You just have to love meaningless symbolism.

I totally agree. The the talking heads on the 24/7's can spin it both ways too no matter what happens. I feel bad for my old dealer so I can say that I would be ok if it passes or not. I've still never heard a great reason why less dealers saves GM money.

He's allowed to have an opinion (as long as he doesn't cross a line with the mods).

Neither you nor I nor (likely) anyone else here is a bankruptcy attorney. Quite frankly I don't have the time or the sanity to dive too deep into researching what laws were bent or broken, if any. From what I can gather, there were some gray areas, as I mentioned before. I'd think that often times there WILL be gray areas in such an unprecidented filing.

His anti GM and blame Obama for everything post get old that is all :o This is a GM fan site after all, and while we are all critical you can easily tell the difference between those that are critical, disappointed, and anti-GM no matter what.

His anti GM and blame Obama for everything post get old that is all :o This is a GM fan site after all, and while we are all critical you can easily tell the difference between those that are critical, disappointed, and anti-GM no matter what.

:lol:

I've owned 7 GMs to 2 non-GM cars in life. I currently have 2 in the stable. Give it up man. I'm sorry my opinion is different than yours, hopefully you won't hang yourself in the closet and beat your wife because of it. :shrug:

I'll be the first one in line to be critical of Obama on most things, but in this particular case, politicians on both sides of the aisle are acting like......well.....politicians.

What do you expect? They do whatever they think they have to get them votes....which takes money....which gets them votes...which takes money....etc, etc, etc.

And that goes for Democrats, Republicans, or the so-called "Independents".

Bob

I feel bad for my old dealer so I can say that I would be ok if it passes or not. I've still never heard a great reason why less dealers saves GM money.

I've been out of albany for a few years now, but I've had quite a few bad experiences with dealers. Those "trouble dealers" get weeded out with this. Those dealers that just dont do well also get weeded out. Yes, they may not cost GM money - but they do represent GM as a sales force. If a GM dealer gives bad experiences, many people will avoid GMs as a side effect - and that will hurt GM.

The closings were done by the book - but the book was rewritten right before the closings.

It's a double-edged sword...a catch-22. I despise gov't interference in private business, so my instinct is to oppose this bill without second thought. However, it was heavy gov't intervention that got all this going in the first place, so its a matter of "can two wrongs make a right in this case"?

They opened the can of worms....now those worms are crawling around in all kinds of cracks and crevices...

Bob, did you catch this little bit of business a while back?;)

http://www.newsweek.com/id/201949?from=rss

LOL. Nope. But why I am not surprised?

Typical.

Seems to be building momentum...


http://www.detnews.com/article/20090724/AUTO01/907240350/1148/auto01/Top+House++Senator+leaders+support+dealer+bill

Top House, Senator leaders support dealer bill

Washington --Auto dealers trying to reverse the closing of more than 3,000 General Motors Co. and Chrysler Group LLC dealers won the backing of two key members of Congress this week.

Sen. Max Baucus, D-Mont., chairman of the powerful Senate Finance Committee, and House Minority Leader John Boehner, R-Ohio, signed on to bills in Congress to reverse the June closing of 789 Chrysler dealers and the planned closing of at least 1,300 GM dealers.

Boehner joins House Majority Leader Steny Hoyer, D-Md., as a co-sponsor in a rare example of party leaders joining forces on a bill. The ranking Republican on Baucus' committee, Sen. Charles Grassley, R-Iowa, is the author of the dealer bill.

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Also joining this week were Sen. Bob Casey, D-Pa., and Rep. Ralph Hall, R-Texas.

That brings the total to 30 senators and 264 House members that are on record in favor of bills seeking to reverse the closings.

GM expects to shrink its dealer network by more than 2,500 dealers by the end of next year, including the voluntary closings of at least 1,250 dealers.

GM and Chrysler argued in hearings this week that the closings are essential. GM said it is giving its 1,300 closing dealers $600 million in wind-down payments, while Chrysler warns it could have to liquidate if the dealer closings, which represent 25 percent of the automaker's dealer body, were reversed.

Sen. Majority Leader Harry Reid, D-Nev., has said he isn't in a hurry to consider the dealer bill, which the White House strongly opposes. The House approved language seeking to block the dealer closings last week as part of an amendment to a spending bill.

I'd love to see my home town dealership re-authorized to sell and service Chevys but this bill is clearly just pandering to constitutes. If it does pass can someone tell me how exactly it will hurt GM. It doesn't cost them anything, the dealer pays for just about everything.

Auto makers actually do dish out money in support to dealers in many ways. Outside of the cost of support and management of franchises, keep in mind that the fewer dealers a car maker has, the less likely they are to have to dish out money and incentives to those dealers to move those vehicles.

Somebody already said it, but the rules were changed in the middle of the game so they could do this. This seems to be an ongoing theme with this administration though.

I don't necessarily think that having all of these dealerships was the right business thing to do, but I also don't think that the way that the bankruptcy laws that had existed in this country for almost 100 years were pissed on in the process is something that should be tolerated.

My leanings to following the rule of law are more powerful than my belief in what may or may not be the correct business model for the current automotive landscape.

I'm not exactly sure if you are grasping the entire situation and are ignoring large parts of it, or if you are simply parroting sentiment you hear. Either way, let me point out:

1. Anyone saying that the rules of bankruptcy were changed or pissed on can't possibly be taken seriously. Ask them exactly what was changed, and they can't name anything factual. Truth is that nothing has been changed. Everything that's happened in the current automotive bankruptcies (outside of the Feds bankrolling each automaker's existence during the process) has precedence.

2. To this very date, there are still people so far gone in their own (for lack of a better word) madness, that they still can not grasp the simple fact that General Motors and Chrysler would be shut down.... PERMANENTLY... this very moment if the Feds hadn't stepped in, and it is impossible to even remotely comprtehend the simple fact that since the government stepped in, bot GM and Chrysler are making the changes to survive that they simply refused to make when they were beholden to entrenched bureacracy and unsustainable situations that those running each respective company created, while lining their pockets with bonuses even when things were going from bad to horrendous.



From my understanding, the closings were done outside of bankruptcy. But they could have been done in bankruptcy as well.

I hope this won't get passed. This is vote pandering.

Damn right it's pandering! I have never heard of any business going through a court bankruptcy and then having congress override what came out.

Absolutely agree!

All the politicos win. They can tell the home constituants the "We sure tried.." routine. Not only has the horse gotten out of the barn, that barn's burned down. You just have to love meaningless symbolism.

I have to say you nailed it 100%.

This whole situation with congress injecting itself into the end result of a 363 simply because a group of powerful dealers who didn't like the outcome is simply maddening.

I see this as the dark side of democracy. It's a situation where something that needs to be done, and has gone through the proper hoops, and given due consideration given the expediency it needed to be settled to save the company is threatened to be ripped to shreds simply because those elected are in a position where they must cater to those who elected them or can threaten to remove them, even when those local intrest threaten the good of the many.

There is a reason the United States is the world's oldest continuous democracy, and even in our case, we have often slid backwards (I can give brief history lessons via e-mail if anyone doubts that).

Before anyone gets on a soapbox, this isn't a conservative-liberal, or democrat-republican view. Tip O'neill once said all politics are local, and I 100% believe that because it's proven every day.

This is pure meaningless symbolism. Obama will certainly veto this bill, and I'm 100% certan there isn't a sould on Capitol Hill that doesn't know it. That's why it's gotten so far, because those voting for this piece of garbage can go back and tell the folks pushing them to act that they tried.

A lesser President would simply give in and sign the crap. I suspect he won't.

I never have thought that closing the dealerships made sense. I mean the reality is...if they survived the train wreck that was the last year...to me that would seem to indicate a pretty solid business..right? I mean maybe I flunked business class...but it's it crazy to think a company just out of bankruptcy is gonna become profitable selling less brands, with less models, through less dealers, at higher prices? Maybe with no competition it would happen...but the reality is..without GM's low prices/competitive dealers..most consumers wouldn't consider the brand..even if GM was making gold plated Impalas.

Bob, did you catch this little bit of business a while back?;)

http://www.newsweek.com/id/201949?from=rss

Paul, once again, although I suspect we may be different political leanings, we are ironically far closer on most everything than we are apart.

Many people here paint the "Government" with a single brush of condemnation, but to be perfectly honest, it's us through those we elect that cause the damage.

Each representative, regardless as to the state, region, or district they represent, are going to "work" for those that elected them. That's what democracy is all about. However, when those constituent's views, positions, or goals are contrary to the common good, that elected person is obliged to carry out his constituent's wishes. The days when a good polititian represented his people not just did their every bidding seems to be long gone or the ones left are few and far between.... and that's sad... and scary.

There's Barney Franks trying to unravel what was accomplished and sticking congress' (some people don't understand there's 3 branches, and government isn't a single animal) nose into a business' day to day operation... something the executive brance has commendably avoided to date. But the bill to strip car makers of the ability to close dealerships is penned by a republican as was the amendment by the infamous Senator Corker to stall dealer closings.

I'll be the first one in line to be critical of Obama on most things, but in this particular case, politicians on both sides of the aisle are acting like......well.....politicians.

What do you expect? They do whatever they think they have to get them votes....which takes money....which gets them votes...which takes money....etc, etc, etc.

And that goes for Democrats, Republicans, or the so-called "Independents".

Bob

Bob, regardless as to your politics, I have to say you also see what's going on very clearly. :)

I never have thought that closing the dealerships made sense. I mean the reality is...if they survived the train wreck that was the last year...to me that would seem to indicate a pretty solid business..right? I mean maybe I flunked business class...but it's it crazy to think a company just out of bankruptcy is gonna become profitable selling less brands, with less models, through less dealers, at higher prices? Maybe with no competition it would happen...but the reality is..without GM's low prices/competitive dealers..most consumers wouldn't consider the brand..even if GM was making gold plated Impalas.

From my understanding, a good portion of the dealerships that are closing voluntarily due to the economy. The other dealers, I think that it is because of location problems. Having a Chevy dealer across the street from another I believe.

But you do have some good points about how are less brands, less models, and less dealers going to help. Here is how.


With less brands, you need less marketing. As much as I have seen people complain about how a certain product doesn't get marketing dollars, part of the problem is that GM has too many products to market, and marketing isn't cheap. So, first GM can save on marketing.

GM can also save on engineering costs and time to market. The G6 came out, then the Aura, then the Malibu. The G6 came out in 2004 as an 05. The Aura a few years later, the Malibu as a 2008 model. Most would say the interior of the Malibu is the best. But they are essentially the same car that is taking a long time to get out all 3 copies. And then you have to market them all. GM could take the marketing and engineering savings and throw it into better development, better materials, and better marketing for the product. Hopefully this would work for a single better model, or maybe 2 models with different price points. A better product could justify a higher price and in turn, better margins.

With fewer dealers, hopefully the people working there would be more knowledgeable about the cars they are selling. We have all had the run with the salesman who can only basically read the window sticker.

Since GM is going down this path, hopefully it is the right path.

Bob, did you catch this little bit of business a while back?;)

http://www.newsweek.com/id/201949?from=rss

Great piece Paul!


I loved this part:

Nowadays, green reasoning is the first refuge of scoundrels. Global warming has become like God: It is an explanation for everything and an all-purpose excuse for the political class to do whatever it wants to do. What a large portion of it wants to do—what it has a metabolic urge to do—is boss people around. It can maximize its opportunities for doing that if it maximizes the number of people dependent on government, and the number of ways in which they are dependent.

From my understanding, a good portion of the dealerships that are closing voluntarily due to the economy. The other dealers, I think that it is because of location problems. Having a Chevy dealer across the street from another I believe.


I think it is performance based as well. The Chevy dealer in Belvidere, IL is closing. However, the Pontiac/Buick/GMC/Cadillac dealership across the street was unaffected.