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Site control assaults property rights

Donna Harris covers automotive retailing forAutomotive News
As General Motors' wind-down deadline for rejected dealers approaches, I've heard horrendous stories about arm-twisting that went on behind the scenes between GM and some of its dealers.

For example, GM says that to keep your Buick-GMC franchise, you've got to give up your Cadillac store. And, not only that, you've got to sign a site control agreement for 25 years to restrict the use of the property to an exclusive GM dealership.

The same sort of arm-twisting went on between Chrysler and some of its surviving dealers. They were told they needed to sell all brands to remain viable dealers. If they were missing a brand and wanted to obtain the franchise, Chrysler made them sign a site control agreement for 30 years.

Think about it: These factories just emerged from bankruptcy. How can they demand that the properties be dedicated exclusively to their franchises — and for 25 or 30 years?

What if the best use of the property is not a GM or Chrysler store? Who can tell what's going to happen in 10 years, let alone 25 or 30?

Dealers in a number of states are lobbying for laws that prohibit forced site control. That kind of coercion attacks our fundamental property rights.

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