Wednesday, July 15, 2009

Backers of efforts to aid auto dealers vowed to keep fighting Tuesday, and said legislation could put closed dealerships back in business by government fiat - the same way dealers say they were shut down.

A pro-dealer amendment has been added to a House appropriations bill, which could boost chances of relief for the dealers.

More than 100 dealers from across the country and key lawmakers, including House Majority Leader Steny H. Hoyer, Maryland Democrat, rallied outside the U.S. Capitol on Tuesday for the amendment and for the separate Automobile Dealer Economic Rights Restoration Act, which they said could save 169,000 jobs.

Supporters of the dealer rights bill now count 242 House co-sponsors from both parties and 20 in the Senate.

However, Senate Majority Leader Harry Reid, Nevada Democrat, downplayed prospects for the legislative efforts at a his Tuesday news conference, saying there are “winners and losers” in bankruptcy.

“Its nothing that is certainly on the top of the agenda in the Senate at this time,” he said.

Chrysler dealers who were forced to close last month expressed hope they will reopen, and General Motors dealers are fighting to remain in business. Both companies went through lightning-quick managed bankruptcies this spring, shedding thousands of dealers in the process.

Jim Koehler, a former Dodge dealer from Scotia, N.Y., said his business could be restored by the legislation.

“My employees are scratching their heads, my customers are saying, ‘What went down here,’ and they’re not happy,” he said.

Mary Jo Dowd, a bankruptcy lawyer who represented area dealer Jack Fitzgerald in the Chrysler case, said the federal government can reverse the dealer closings because of its ownership stake and funding of the automakers.

“Since the government is now the majority owner, it could say to GM, ‘You need more dealerships and you should send in the ones that already know what they’re doing,’ ” she said.

Ms. Dowd, partner in the Washington law firm of Arent Fox, also played a role in drafting the dealer rights act.

Much of the Maryland congressional delegation spoke at the news conference, including Democrats Sen. Benjamin L. Cardin, Mr. Hoyer, and Rep. Chris Van Hollen (a key aide to House Speaker Nancy Pelosi, California Democrat).

Reps. Roscoe G. Bartlett, Maryland Republican, and Steven C. LaTourette, Ohio Republican, also spoke. Mr. LaTourette has sponsored an amendment to the Financial Services appropriations bill that would require carmakers receiving federal aid to renew the terminated dealer agreements. Mr. Hoyer also supports that measure. “My own view is the provision is going to stay in the bill,” he told reporters.

Rep. Sheila Jackson Lee, Texas Democrat, drew a strong response when she dubbed the legislation the “dealer civil rights restoration act.”

Mr. Hoyer said Congress was committed both to the automakers and the dealers.

“We understand [the automakers] need to save money. And I asked them, ‘How does closing the dealers save you money?’ ”

Mr. Hoyer paused a moment and said, “That’s the response I got. Silence.”

The most emotional remarks came from Lelica Callaremi, 27, who emphasized the family connections at Callaremi Pontiac Buick Cadillac GMC in northern New Jersey. It’s the family’s only business.

“How are we taking away and shutting down without a reason” what families have worked for generations to build?

“Mr. Henderson and Mr. Press, how do you sleep at night?” she said, addressing GM Chief Executive Officer Frederick “Fritz” A. Henderson and Chrysler Vice Chairman James Press.

Miss Callaremi is part of the third generation to work at the 41-year-old dealership, and graduated from business school in 2006 so she could take over someday. Many family members and even her fiancee, Jason Polecco, work there, she said.

They are to be wed in two months.

“I should be planning my wedding right now,” she said, tearing up.

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