Legislation Would Restore Franchise Law Rights to Auto Dealers

Congressman Ted Poe (TX-02) announced that he is cosponsoring the Automobile Dealer Economic Restoration Act.  This legislation reinstates auto dealer franchise agreements prior to the bankruptcies of Chrysler and General Motors.

“Small businesses are the backbone of our economy,” said Poe.  “Our local car dealers not only employ thousands of people and generate millions of dollars in tax revenue, but they are also part of our communities – most locally owned and operated for generations.

“Many of the dealerships have remained profitable despite Chrysler’s and GM’s bankruptcies,” continued Poe. “This legislation will stop the arbitrary closure of dealerships and reinstate franchise agreements set forth by state franchise laws.”

H.R. 2743, The Automobile Dealer Economic Rights Restoration Act:

* Restores the protections of state motor vehicle franchise laws to General Motors and Chrysler dealers as they existed prior to each company's bankruptcies

* Preserves General Motors and Chrysler car dealers' rights to recourse under state law

* At the request of an automobile dealer, requires General Motors and Chrysler to reinstate franchise agreements in effect prior to each company's bankruptcies

* Makes clear that the legislation is not intended to void the court-ordered transfer of assets from Chrysler to New CarCo or the transfer of General Motors assets that could be approved by a court after the introduction of the Act.