Once again, automobile manufacturers have discovered that they have no friends in Washington.
Dealers seem to have all the friends on Capitol Hill.
So now General Motors and Chrysler are concerned about what Congress might do about all those dealers they threw out in the cold. If some members of Congress had their way, they would probably just reinstate all the dealers with their franchises and tell the manufacturers to be nice to them.
It seems late in the game to reinstate thousands of dealers. But many of them are still interested in getting their franchises back and continuing to sell cars for GM and Chrysler.
It would be impossible for many of those dealerships to crank up their businesses and get back in gear. Many franchises have been transferred to dealers down the street or across town, and it
certainly wouldn’t make sense to add even more franchises.
Some rejected dealerships have switched to other franchises, and no make would have any interest in dualing with another. And quite a few dealers have sold their real estate and gone on to other careers.
The time has passed for many of those franchises and locations -- regardless of how important they might be for their communities.
Congress seems ready to give dealers who have the interest an opportunity to try and regain their franchises. With arbitration, a disinterested third party will decide whether they should be reinstated. If a franchise already has been given to another dealer, the process has all the ingredients for chaos.
A more sensible outcome from arbitration hearings might be to compensate canceled dealers in an amount that the arbitrator deems reasonable. Rather than reinstating a franchise, just increase the compensation.
Most folks in the industry agree that the capricious manner in which the franchises were canceled should be adjudicated somehow.
When a new-car dealer thinks that the future holds a particular set of circumstances, he or she is willing to act in a certain manner and sign an agreement with certain provisions. But if those provisions don’t happen, then all too often the dealer is left holding the bag. That’s true for more than just the canceled dealers.
At best, the situation is a hornet’s nest. And it gets worse from there.
Trying to make any sense out of all this would require a modern-day Judge Landis.
Good luck finding one.