Now that Congress has decided to help reshape the General Motors Co. and Chrysler Group distribution channels, it's up to the automakers and their rejected dealers to conclude the matter as quickly as possible.
It has been more than half a year since the owners of almost 2,150 dealerships began learning that GM and/or Chrysler didn't want them anymore. From the beginning, it was an awkward, contentious process that was allowable under the U.S. Bankruptcy Code but that seemed unjust and unreasonable to many dealers and their sympathizers.
Whether prompted by factory officials or the Wall Streeters on the automotive task force, the wholesale dealership terminations created an alliance of dealer organizations that pushed for legislation to give dealerships back to rejected dealers. It didn't happen.
But the dealer alliance -- spearheaded by the ad-hoc Committee to Restore Dealer Rights and including the National Automobile Dealers Association, National Association of Minority Automobile Dealers and Automotive Trade Association Executives -- did not come away empty-handed.
Six months after Chrysler rejected 789 dealerships and GM slated 1,350 stores to be closed, Congress passed legislation that gives the owners of those rejected dealerships access to neutral arbitration under the American Arbitration Association.
The legislation comes too late for many dealerships that already are closed or have signed wind-down agreements with GM. The timetable established by the bill means the process could drag on for another 180 days or more. For some dealerships that are struggling to keep their doors open, another six months could be fatal.
Additionally, arbitration could be expensive. Depending on the complexity of the case, dealers who choose arbitration could end up paying as much as $100,000 in various fees, dealer attorneys say.
Although GM and Chrysler may be tempted to drag out the process to limit the number of dealers who choose arbitration, it behooves the factories to move as quickly as possible, even settling claims before arbitration when possible.
The sooner GM, Chrysler and their dealers can settle the matter, the sooner they can put the animosity and mistrust behind them and rebuild their working relationships.
Both sides have to accept imperfection. The clumsy way in which many dealers were put out of business doesn't allow for perfect outcomes. But speed is of the essence.