House reverses Obama on car dealerships - they remain openIt seems Obama's star power is fading rapidly. The Treasury Appropriations bill was passed 219-209 yesterday in the House. The roll call shows that the 219 is 215 dems and 4 pubs.
Tucked away in the bill is a provision that is a bit of extortion: No money can be used to obtain a financial ownership in any car manufacturer if that manufacturer deprives a car dealer of its economic right under its dealer agreement. Thump!
The Cleveland Plain Dealer summarizes:
"The measure would overturn bankruptcy court decisions to shutter 789 Chrysler dealers and more than 2,000 GM dealers. In Ohio, 47 Chrysler dealerships and 79 GM dealerships would be affected. The closings would eliminate more than 100,000 jobs across the nation and roughly 8,700 jobs in Ohio, the industry's trade association predicts."
More good stuff from the amendment's author, Rep. Steve LaTourette, (R-Ohio), “I don’t think Chrysler or GM has been able to demonstrate there is a savings associated with fewer dealers, since the dealers themselves bear the costs of operating their dealerships with little help from the manufacturers,” LaTourette said. “I think the closing of these dealerships was punitive and secretive, and it’s the most un-American thing for the government to help force you out of business and deprive you of the American dream.”
The White House issued a statement earlier this week (before the vote):
"The Administration strongly opposes the language in the bill that attempts to restore prior Chrysler and General Motors (GM) franchise agreements. The auto companies, like many in the country, face difficult economic and fiscal decisions. The Administration shares the Committee’s concern for dealers affected by Chrysler and GM bankruptcy agreements, and has taken steps to help support viable dealerships during this transition. For example, [blah, blah, blah] ...
It seems Obama is feeling pressure from all sides now.
Here's the language from the bill:
"Sec. 745. (a) None of the funds made available in this or any other Act may be used to obtain a financial or ownership interest (or right to acquire such an interest) in an automobile manufacturer that deprives an automobile dealer of its economic rights under a dealer agreement and does not assume (or assign to a successor in interest) each dealer agreement which is valid and in existence (and has not been lawfully terminated under applicable State law) before the date of the commencement of a case under title 11, United States Code, by such automobile manufacturer. (b) Any automobile manufacturer with respect to which the Federal Government has a financial or ownership interest (or right to acquire such an interest) shall, to the extent that a valid dealer agreement existing immediately before the date of the commencement of a case under title 11, United States Code, by such automobile manufacturer is not assumed by or assigned to another automobile manufacturer, require any new entity created in such case to enter into a new dealer agreement with the dealer whose agreement was not so assumed or assigned, and on the same terms as existed immediately before such date."
http://www.examiner.com/examiner/x-3132-Philadelphia-Conservative-Examiner~y2009m7d18-House-reverses-Obama-on-car-dealerships--they-remain-open
