When General Motors emerges from bankruptcy, the new GM and its surviving dealer network may not be granted licenses to do business in Louisiana, warns Lessie House, executive director of the Louisiana Motor Vehicle Commission.
Licensing is never automatic, House told Automotive News. GM's bankruptcy and new agreements are like a freight train coming at us. You can't just roll over.
House says the letters of participation GM sent to dealers it wants to keep violate state law. The newly revised contracts are still coercive, and they attempt to extend the U.S. Bankruptcy Court's authority over these dealerships, she says.
House is still evaluating GM's revised agreement. But she says she opposes a provision that says the dealer must agree to give the Bankruptcy Court complete and exclusive jurisdiction to interpret and enforce disputes over the terms of the agreement in the future.
It looks like GM is trying to use the Bankruptcy Court to do something they couldn't normally do, House says.
GM spokesmen could not be reached for comment this afternoon.
House sent a general warning to all dealers and manufacturers doing business in Louisiana.
Without naming GM, the bulletin said that the commission received proposed dealer agreements that violate state laws protecting dealers from unfair business practices. The bulletin warns that if the agreements violate the law, the state could reject the manufacturer's business license.
GM may face opposition in other states. Carol Kent, director of enforcement for the Texas Motor Vehicle Commission, said Texas and other states she has contacted are considering similar warnings.