WASHINGTON (Dec. 17, 2009) — President Barack Obama signed legislation that would give rejected General Motors Co. and Chrysler Group L.L.C. dealers access to neutral arbitration if they want to be reinstated, kicking off a six-and-a-half months arbitration process.
GM and Chrysler now have 30 days to send letters to the owners of about 2,150 rejected auto dealerships informing them of their rights under the new law and spelling out the reasons that their franchise agreements were terminated.
With President Obama's signature, the eliminated dealerships have 40 days to give notice that they intend to seek arbitration.
Arbitration must be completed within six months, and dealerships that win must receive a letter of intent from the auto makers within another 14 business days.
The legislation that the President signed was a $446 billion spending bill that contained the dealer-arbitration provisions spearheaded by Rep. Steny Hoyer, D-Md., the House majority leader, and Sen. Dick Durbin, D-Ill., the assistant Senate majority leader.
Both lawmakers acted this month after GM and Chrysler broke off settlement talks and announced plans to create neutral arbitration applying the original criteria they used to mark dealerships for termination.
The new law contains criteria more favorable to dealers than those envisioned by GM and Chrysler.
This article appeared on the Web site of Automotive News, a Detroit-based sister publication of Tire Business.