White House rips auto dealer relief efforts

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By William Ehart

The White House on Wednesday blasted growing, bipartisan congressional efforts to aid closed auto dealers but stopped short of threatening a veto.

An amendment to put dealers back in business survived a challenge in the House Rules Committee on Tuesday and is to be voted on as part of the financial services appropriations bill this week.

The Obama administration said reversing dealer closings would set a "dangerous precedent, potentially raising legal concerns, to intervene into a closed judicial bankruptcy proceeding on behalf of one particular group at this point."

The statement is consistent with the administration's position during the bankruptcies of General Motors Corp. and Chrysler LLC, in which the automakers shed more than 3,000 dealerships.

Nonetheless, battle lines are being drawn as a number of high-ranking congressional Democrats back a measure opposed by a president of their own party.

Democrats are far from unanimous Senate Majority Leader Harry Reid, Nevada Democrat, threw cold water on the dealer rights bid Tuesday, saying it was not a priority. Unlike in the House, however, the chief sponsor of dealer legislation in the Senate is a Republican, Sen. Charles E. Grassley of Iowa.

The administration was instrumental in this spring's bankruptcy reorganizations of GM and Chrysler. The automakers argued with administration backing that they needed leaner, more profitable dealer networks.

GM spokesman Greg Martin said Tuesday that the dealer legislation puts the automaker's current restructuring plan "at risk."

A leading supporter of dealer relief, House Majority Leader Steny H. Hoyer, Maryland Democrat, defended the amendment Wednesday but signaled there was room for compromise.

"While this legislation is not perfect, it does represent real concerns expressed by many individuals across the country about an unfair and unclear process for closing auto dealerships," he said.