U.S. Rep. Steven C. LaTourette (R-OH) and 99 other House members today sent a letter to key Senate leaders encouraging them to retain House-passed language that will protect the economic rights of automobile dealers harmed during bankruptcy proceedings.

 The bipartisan letter, signed by 100 House members, was sent to Majority Leader Harry Reid (D-NV) and Minority Leader Mitch McConnell (R-KY), and top lawmakers on the Senate Appropriations Committee -- Chairman Daniel Inouye (D-HI) and Ranking Member Thad Cochran (R-MI).

 The House passed the financial services spending bill, H.R. 3170, which included the congressman’s auto dealer amendment, on July 16 by a vote of 219-208.  Section 745 of the bill prohibits the federal government from spending funds to provide for dealership closures and requires that franchise agreements be restored for automakers that are at least partially owned by the government.

 House members led by Rep. LaTourette are voicing their support for the provision as Congress looks toward conference negotiations with the Senate this fall.  On July 9, the Senate Appropriations Committee passed its version of the spending bill, S. 1432, which does not contain auto dealer protection language.  The bill will be considered by the full Senate some time after the August recess.

 LaTourette said 789 Chrysler dealers were given just 26 days to shut down through a rapid-fire bankruptcy process, and only two states saw more Chrysler/Dodge/Jeep dealer closings than the 47 closed in Ohio -- Pennsylvania and Texas.  The dealers were given virtually no help by Chrysler, including financial assistance to wind-down their dealerships.  GM, meanwhile, plans to shutter more than 2,000 dealerships, and only Pennsylvania will see more GM closures than the 79 slated to close in Ohio. Those dealers will close over the coming year and many were compensated up to $1 million in exchange for closing and signing wind-down agreements.

 “Auto dealers provide good jobs and play key economic roles in local communities,” LaTourette said.  “The fact that an out of touch task force helped make the call to shut these businesses down, as well as the disregard for state franchise laws, does not sit well with me. I hope that in the fall the House and Senate can negotiate a bill that includes this provision which will correct the way that these dealers have been mistreated.”

 Here is the text of the letter:

August 6, 2009

Dear Leader Reid, Minority Leader McConnell, Chairman Inouye and Ranking Member Cochran:

We write to encourage your support for a provision to protect the economic rights of automobile dealers (Section 745) included in the House passed H.R. 3170, the Financial Services and General Government Appropriations Act.

Automobile dealers provide good jobs, serve as critical economic engines, and play key leadership roles in local communities.  However, Chrysler and General Motors (GM) are now revoking the franchise agreements for nearly 3,000 dealerships across the country.  The federal government has invested over $56 billion in Chrysler and GM in an effort to ensure their long term viability.  While we strongly support the car manufacturer’s goal of long term strength, we have serious concerns about the decision to unfairly strip away protections afforded to automobile dealers by state franchise laws.  The shuttering of what are in many cases successful and profitable dealerships will threaten as many as 200,000 American jobs, hurt local economies, and significantly undermine our efforts to promote a speedy economic recovery.

The alarming dealer closings have been the subject of several congressional hearings, and more than 260 Members of the House and 30 Members of the Senate have cosponsored legislation (H.R. 2743/S. 1304) similar to that which is included in the House Financial Services Appropriations bill.  There is grave concern in Congress regarding the economic impact of Chrysler and GM’s decisions.

We can never afford to lose good jobs and small businesses, but especially not at a time when we are experiencing such economic challenges. The dealers deserve fair treatment, and we request the Senate support the House auto dealer language during conference consideration of the Financial Services Appropriations bill.  Thank you for your consideration and we look forward to working with you to save jobs and to support the American economy.