From AAIA Capital Report

White House officials and executives from the New General Motors Corp. (GM) and Chrysler Group LLC last week met with congressional leaders in hopes of stopping legislation that would restore rights to dealers that the car companies were looking to close. In May, Chrysler announced the closing of 789 dealers and GM asked roughly 1,300 dealers to sign off on "wind-down" agreements. The dealership closings, approved by the bankruptcy court, were part of the companies’ restructuring plans as part of their federal bailout.

Various pieces of legislation are now making their way through Congress, including two stand-alone bills (H.R. 2743 and S. 1304), that would override a bankruptcy court ruling by restoring state motor vehicle franchise laws that pre-dated the bankruptcy filings. There is also an amendment to a financial services fiscal year 2010 appropriations bill approved by the House Appropriations Committee on July 7 that would require the automakers to restore terminated dealership franchise agreements. That bill is scheduled for House floor consideration this week.

House Majority Leader Steny Hoyer (D-Md.) suggested that the car companies act quickly to come to an agreement with the dealers if they want to prevent the legislation from moving forward. The administration is opposed to congressional efforts to weigh in on the dealer closing controversy. The House Judiciary Committee has scheduled a July 22 hearing on the dealer closings and the dealers plan to lobby Congress this week.