WASHINGTON -- General Motors executives have been pressuring individual dealers to sign a statement saying they oppose legislation that would restore terminated dealerships rights, according to a U.S. senator, a dealers group and dealer representatives.
Sen. Charles Grassley, R-Iowa, complained that GMs district offices were strong-arming their dealers into signing the statement.
Some dealers fear that GM could take action against them if they do not sign a letter of opposition to the bill, Grassley said in a letter yesterday to GM CEO Fritz Henderson. Its alarming to have GM corporate leaders force dealers -- some who are losing everything they worked hard to build -- to take an active stand against it.
GMs Washington spokesman Greg Martin said in an e-mail: Many dealers who signed participating agreements are ready to move forward, and so are we as a new company. Certain proposed legislation puts our progress and viability at risk. We have a right to have our voice heard, too, and we look forward to responding to Senator Grassleys letter.
Grassley introduced Senate bill S1304, and the House Appropriations Committee this week passed HR2743 as part of a spending measure.
Both bills would restore terminated franchises to their status before GM and Chrysler LLC filed for bankruptcy this spring. The car companies would have to work through state courts rather than U.S. Bankruptcy Court if they wanted to continue with the terminations.
The opposition statement that dealers were asked to sign was issued July 6 by the GM National Dealer Council, an elected group of GM dealers,
The council called on dealers to sign and return a statement by the next day that said, I agree with the National Dealer Councils position to NOT support the passage of HR 2743, a copy of the letter shows.
The letter to dealers said the legislation would nullify GMs plan to reshape its dealer network into a more effective, stronger distribution channel.
Duane Paddock, the head of the GM dealer group, did not immediately return a phone message left at his Kenmore, N.Y., office.
The Automotive Trade Association Executives, a group of more than 100 state and metropolitan-area dealer associations, passed a resolution Thursday condemning what the group called heavy handed pressure tactics and veiled threats from GM management.
The resolution contended that GM zone managers made phone calls to individual dealers asking them to sign the dealer council statement, a copy of the resolution shows.
Reports of complaints
Three dealer representatives said that they had received complaints from a total of about 20 individual dealers who had been contacted by GM managers.
They felt tremendous pressure to sign the form, Don Hall, head of the Virginia Automobile Dealers Association, said in an interview today. He said he received complaints from 10 to 14 Virginia dealers.
Tim Jackson, head of the Colorado Automobile Dealers Association, said he had received similar complaints from about a half-dozen retailers in his state.
Some had received three or four calls each from GM asking them to sign the letter and then to call back when they actually sent the signed statement, Jackson said in an interview.
Jim Moors, franchising director at the National Automobile Dealers Association, said he got several calls from dealers who complained that they felt coerced by calls from GM offices.
GM has disclosed plans to reduce its dealerships from 6,000 to 3,600. Chrysler has eliminated 789 stores, or about a quarter of its U.S. total.