WASHINGTON -- General Motors Co. CEO Fritz Henderson told lawmakers yesterday that the company was close to announcing it would restore a limited number of dealer franchises that were mistakenly terminated but would not provide compensation to any dealers, a congressman said.
Rep. Pete Hoekstra, R-Mich., said Henderson told the Michigan congressional delegation that an agreement could be announced as early as today.
Henderson said on the conference call that GM intends to review plans to shutter 1,350 dealerships by October 2010 to see whether any errors were made, Hoekstra said in an interview today.
The CEO also told lawmakers that no additional compensation would be given to rejected dealerships because they already had received financial assistance when the wind-down plans were announced, Hoekstra said.
“He was very vague, and the plan sounded inadequate to me,” Hoekstra said. “He explained, for instance, that they might reopen some franchises if they found errors, but he didn't say what those errors might be.”
GM spokesman Greg Martin declined to comment.
$3,000 a car?
Last month, the four dealer groups negotiating with GM and Chrysler Group proposed third-party arbitration of rejected dealers' appeals. Senior Democratic lawmakers backed this proposal.
Dealer groups also called for GM and Chrysler to pay dealers $3,000 per vehicle sold in 2006, 2007, or 2008, with the dealer choosing the year.
In talks at the beginning of this month, GM countered with a proposal that appeals from rejected dealers be submitted to company mediation rather than third-party arbitration, participants in the meeting said.
GM hasn't met with dealer groups for more than two weeks, said Tammy Darvish, a leader of a rejected-dealers group. The automaker postponed a meeting scheduled for today, she said.
“We're not aware of any agreement,” said Darvish, a leader of the Committee to Restore Dealer Rights.
Hoekstra said GM is stalling, an opinion he based on the lack of detail in Henderson's plan yesterday and the slowdown in GM-dealer talks.
“I think GM is telling Congress: ‘We're close to a deal, you don't have to do anything,' ” the lawmaker said. “But GM isn't doing anything. They're just playing out the string because rejected dealers can't hold out that long.”
The four dealer groups have been meeting together with the automakers since Sept. 30 in talks intended as an alternative to legislation that would reverse dealer terminations. That bill passed the House last summer but stalled in the Senate.
Renewed legislative efforts
Senior lawmakers have threatened to revive the legislation if GM and Chrysler don't negotiate in good faith.
Hoekstra expressed concern today that any GM reinstatements might be “based on political calculations to stop legislation from making its way through Congress rather than real business decisions.”
This week, Henderson met with Sen. Richard Durbin of Illinois, the Senate's No. 2 Democrat, to discuss the dealer talks. Durbin has pressed GM and Chrysler to negotiate with all dealer groups.
Chrysler terminated 789 dealerships earlier this year, and GM plans to shut 1,350, about a quarter of each company's networks. GM has restored about 70 franchises that had been slated for cancellation.
Spokesmen for the National Automobile Dealers Association did not respond to requests for comment today.