Months After the Fact, Dealers Still Fight Chrysler, GM Cuts

(MoneyWatch)  Auto dealer groups are still fighting mass dealer terminations at General Motors and Chrysler, months after Chrysler pulled the plug on almost 800 dealers, and GM put another 1,100 on notice that they will be dropped next year.

The car companies have exploited several splits among the dealers and their supporters: between "have" dealers and "have-nots"; between minority-group dealers and other dealer groups; and among the largely Democratic legislators who are trying to help the dealers.

The "haves," represented by big dealer groups like AutoNation, the country's largest dealer chain, are OK with Chrysler and GM getting rid of a lot of "have-nots." Minority-group dealers have argued that the cuts fell disproportionately on them. Democrats differ over how or even whether to help.

Even if the dealer groups had been able to present a united front, it's also been tough for the dealers to get a handle on where exactly to go with their complaints.

Besides the car companies themselves, interested parties include the U.S. Treasury Department, which ushered Chrysler and GM through bankruptcy, plus a long list of committees and sub-committees in both the U.S. Senate and the U.S. House of Representatives.

For instance, a couple members of the National Auto Dealers Association testified against the dealer cuts last week before the House Small Business Committee. Other legislative bodies that have gotten involved since the cuts were announced last spring include the Senate Banking Committee and the House Commerce Subcommittee for Oversight and Investigations.

Progress for the dealers has been slow. Earlier this month, several dealer groups finally united to sign a common proposal that seeks greater transparency into how the automakers decides which dealerships to terminate, and for "fair and proper financial compensation" for dealers who can't get reinstated.

"We are pleased that all of the dealer groups are now on the same page," said NADA Chairman John McEleney.

Photo: NADA