Durbin Statement on Agreement Between GM and Groups Representing Closed Dealerships

Durbin Also Supports Chrysler's Best and Final Offer to Dealers

[WASHINGTON, D.C.] – Assistant Senate Majority Leader Dick Durbin (D-IL) released the following statement today applauding an agreement between GM, the National Automobile Dealers Association (NADA) and the National Association of Minority Automobile Dealers (NAMAD) regarding the restructuring of GM’s dealer network. Their announcement outlines a comprehensive and transparent review of termination decisions and formal reinstatement process should individual dealerships meet or exceed GM’s dealership criteria.


“Today’s announcement is the result of months of good faith negotiation and compromise,” Durbin said. “This deal provides dealers seeking a review of GM’s termination process and the opportunity to be reinstated with powerful tools as this process moves forward. All sides deserve recognition for working through these issues in a constructive manner and I’m happy to support their agreement.”


Durbin also added his support to a similar proposal Chrysler has offered its dealer network. While not agreed to by groups representing terminated dealerships, Chrysler has said it represents the company’s best and final offer. This offer will result in immediate relief for terminated dealers whereas legislative options currently on the table may draw the reinstatement process out for months or years.


“The offer Chrysler has brought to the table is transparent and fair. As with the GM deal, terminated Chrysler dealers will have the opportunity to enter binding third-party arbitration and receive a transparent review of the termination process,” Durbin said.


Durbin, along with House Majority Leader Steny Hoyer (D-MD), have lead negotiations between GM, Chrysler and auto dealer groups since September.


Key Elements of the GM. NADA, NAMAD Agreement:


• Binding Third-Party Arbitration. Dealers seeking reinstatement may now take their case to a third-party arbitrator. The arbitrator’s role would be to determine whether a dealer met or exceeded GM’s termination criteria. If the arbitrator finds for the dealer, GM has agreed to reinstate the dealer. Under this plan, a dealer could receive a decision as early as 4-6 weeks after requesting arbitration.


• Review Process Available to All Terminated Dealers. All terminated dealers will be granted a full review of the termination process.

• Face-to-Face Review for All Dealers. GM will further provide a face-to-face review for all terminated dealers. Dealers would meet with senior company officials, who would have the authority to reinstate meritorious dealers. In advance of these meetings, all dealers would receive a letter from GM specifically identifying the reason(s) for termination. This review is a prerequisite for participating in the binding arbitration.

• Additional Compensation for Personal Guarantees. GM has agreed to provide additional compensation to terminated dealers who acquired their dealerships with personal guarantees.

Summary of Chrysler’s Best and Final Offer to Dealers:

• Provides each rejected dealer the general criteria and standards used by the former Chrysler LLC in making its rejection decisions and outlines how the specific criteria was applied to the individual rejected dealer’s circumstances.

• Provides rejected dealers with an opportunity to challenge the termination decision by presenting relevant information to senior company officials who will have authority to reinstate meritorious dealers.

• Provides a binding independent review, if a rejected dealer is not reinstated after meeting with company officials. Chrysler Group will abide by the decision of the independent review panel.

• Provides two opportunities for joining the dealer network, if the panel rules in the rejected dealer’s favor: rejoin in the previous market area or, if that is not possible, be offered an open point from a list of open availability.