US House Approves Dealer Resurrection

The battered US dealership network, severely damaged by the bankruptcy process through which two of the biggest carmakers in the US had to go through, received today a piece of good news, as the US House of Representatives has approved a set of measures designed to help them survive.

The House voted 219-208 for a $24.2 billion spending bill for the next fiscal year, which starts on October 1. The bill now faces the scrutiny of the Senate and the opposition of the Obama administration which, as the main artisan of the Chrysler and GM reorganization, believes the dealer cuts were necessary.

The two manufacturers have scrapped or will scrap, together, over 2,000 dealerships nationwide. According to the provisions of the new bill, the dealers would return to their previous status and will have to be taken to court by the manufacturers if they are to be closed.

"If Congress reverses this process, it flies in the face of a U.S. vehicle market that has declined 40 percent since 2007," Peter Grady, Chrysler vice president said in a statement on the company's blog, quoted by Autonews. "Indeed, the U.S. dealer network was built to serve a market that once sold 16 million vehicles a year. Those days are gone."

"Chrysler has had many conversations with members of Congress to explain the critical importance of an effective dealer network to the new company. We have also discussed with members of Congress and Congressional Leadership actions Chrysler has taken to assure a soft landing for dealers who remain with the bankrupt old Chrysler LLC," John Bozzella, Chrysler vice president added.