Editor's note: An earlier version of this story incorrectly reported that the National Association of Minority Automobile Dealers supported Chrysler's plan for rejected dealers. The group only announced support for General Motors' plan for the rejected dealers.
WASHINGTON -- A minority-dealer group, breaking ranks with other dealer organizations, on Friday praised General Motors Co.'s plans to allow rejected dealerships to appeal to third-party arbitrators.
“This is a fair way to allow dealers to receive additional wind-down compensation or seek reinstatement,” said Damon Lester, president of the National Association of Minority Automobile Dealers.
Both the National Automobile Dealers Association and the Committee to Restore Dealer Rights, a rejected-dealer advocate, have criticized GM's plan as inadequate. The GM Minority Dealers Association also has been critical.
NAMAD's comments dilute lobbying efforts by dealer groups to push for congressional passage of legislation to reverse approximately 2,100 dealership terminations at both GM and Chrysler Group. NAMAD's statement did not take a position on Chrysler's plan for rejected dealers, which was also announced this past week.
Lester on Friday asked lawmakers not to take further action on this legislation.
If the legislation were enacted, he said, it would become mired in court challenges from the automakers, leaving struggling minority dealerships in limbo.
NADA spokesman David Hyatt had no immediate comment.
"GM and Chrysler have demonstrated that even commitments in writing are meaningless and I fear for the minority dealers that they will become victims yet again to false promises," said Tammy Darvish, a leader of the Committee to Restore Dealer Rights, a rejected-dealers group.
GM and Chrysler broke off settlement talks that had been going on since September while offering third-party arbitration as an option to rejected dealerships.
The talks were organized by senior lawmakers as an alternative to legislation.
The House passed a bill last summer to restore dealer franchises, but it has stalled in the Senate and has been opposed by the Obama administration.