A senior lawmaker rebuked Chrysler Group for reserving the right to challenge the arbitration law in letters it sent last week to rejected dealerships.
Rep. Chris Van Hollen, the sixth ranking House member, said the law enacted in December gives dealerships “a fair shot at putting people back to work and selling American-made cars.”
“Chrysler's suggestion that they may now challenge this legislation is very troubling and will do nothing to help turn the struggling car maker around,” Van Hollen, D-Md., said in an e-mailed statement on Friday. “It is my hope that Chrysler will allow the arbitration process to play itself out and abide by the outcome of these deliberations.”
Van Hollen's warning note carries weight in part because the U.S. government owns about 10 percent of Chrysler.
Van Hollen, assistant to Speaker Nancy Pelosi, co-authored the legislation and played a key role in getting it passed in December after Chrysler and General Motors Co. broke off settlement talks with dealer groups.
Chrysler made its assertion in a so-called answering statement that was a response to the notices from 418 rejected dealerships that they intend to seek arbitration.
The automaker's statement said in part: “By filing this answer statement or by otherwise participating in this arbitration as required by the legislation, Chrysler Group does not waive any rights, remedies and defenses available to it, all of which are expressly reserved, including without limitation Chrysler Group's right to challenge the legislation, in whole or in part, on constitutional or any other appropriate grounds in this proceeding or in any other proceeding.”
Chrysler spokesman Gualberto Ranieri said in an e-mail today, “We've been on record more than once on topics such as dealer network including the arbitration process. Therefore we do not have much to add.”
One dealer attorney, Craig Allely of Denver, expressed concern that Chrysler might mount a legal challenge to the new law if the company loses in arbitration and wants to avoid reinstating a dealership.
But another dealer lawyer, Leonard Bellavia of Mineola, N.Y., said he thinks Chrysler is just staking out a legal position rather than voicing a credible threat.
Said Bellavia: “It wouldn't dare risk the political uproar that would ensue if a company that received federal money turned around and sued to overturn a U.S. law.”