Twenty Minnesota dealers received preliminary calls from General Motors informing them that their GM franchises will be reinstated. This group comes from a pool of 30 GM dealers who sought to maintain their franchises by filing for arbitration in January. Rather than face arbitration, GM decided to voluntarily reinstate franchises for these 20 dealerships.

 

Dealers petitioned Congress for relief from the unwarranted termination of franchises and dealers resulting from GM and Chrysler bankruptcies last year. In December Congress passed a law calling for arbitration proceedings for dealers who wanted to have their franchise termination reviewed. Of the 30 eligible Minnesota GM dealers who elected arbitration, 16 were from “total wind down” dealerships facing complete termination. The other 14 were “partial wind down” dealerships who lost one or more franchises, but were continued with others.

 

It appears now that all of the arbitrating “partial wind down” franchises will be reinstated. These are largely Cadillac franchises in Greater Minnesota. The results are not as favorable for “total wind down dealers” – particularly in the Twin Cities Metro Area. It appears as though General Motors wants to proceed to arbitration with 10 of the 16 “total wind down” dealerships.

 

As this edition of the MADA Newsletter went to print, GM dealers were still waiting for written confirmation and details of the reinstatement offer. Also, Chrysler has shown no inclination to back off from any of its terminations. Five Minnesota Chrysler dealer arbitrations are proceeding.

MADA and several Minnesota Toyota dealers met with U.S. Senator Amy Klobuchar’s staff to discuss Toyota’s recent recall problems.

 

Senator Klobuchar is a member of the U.S. Senate Committee on Commerce, Science and Transportation.   The committee held a March 2^nd hearing to discuss Toyota’s recalls and the Government’s response. That committee took testimony from U.S. Secretary of Transportation, Ray Lahood, David Strickland, Administrator of the National Highway and Traffic Safety Administration (NHTSA), and several executives of Toyota Motor Company. Congress has recently held a series of hearings on the Toyota safety issue, and is considering serious reforms of NHTSA and federal auto safety laws aimed at preventing similar problems in the future.

 

In light of the Senator’s interest in the Toyota issue due to her membership on the key committee, Minnesota dealers sought a meeting to make sure Senator Klobuchar was aware of how the negative news about Toyota products affects sales and employment in Minnesota. Dealers also expressed their recognition that the Senator indeed has a responsibility to question NHTSA and its relationship with those it regulates. However, dealers also asked the Senator’s office to consider and question whether Toyota has interacted with federal regulators in a manner that other automakers have not.

 

Senator Klobuchar has questioned whether NHTSA was aggressive enough in investigating Toyota and whether allowing former NHTSA employees to work for auto manufacturers is proper. The Senator has noted publicly the harm caused to both consumers and local auto dealers because federal regulators did not respond quickly enough to safety concerns. 

 

MADA thanks Senator Klobuchar for her willingness to consider the effect of this issue on Minnesota dealers.

Twenty Minnesota dealers received preliminary calls from General Motors informing them that their GM franchises will be reinstated. This group comes from a pool of 30 GM dealers who sought to maintain their franchises by filing for arbitration in January. Rather than face arbitration, GM decided to voluntarily reinstate franchises for these 20 dealerships.

 

Dealers petitioned Congress for relief from the unwarranted termination of franchises and dealers resulting from GM and Chrysler bankruptcies last year. In December Congress passed a law calling for arbitration proceedings for dealers who wanted to have their franchise termination reviewed. Of the 30 eligible Minnesota GM dealers who elected arbitration, 16 were from “total wind down” dealerships facing complete termination. The other 14 were “partial wind down” dealerships who lost one or more franchises, but were continued with others.

 

It appears now that all of the arbitrating “partial wind down” franchises will be reinstated. These are largely Cadillac franchises in Greater Minnesota. The results are not as favorable for “total wind down dealers” – particularly in the Twin Cities Metro Area. It appears as though General Motors wants to proceed to arbitration with 10 of the 16 “total wind down” dealerships.

 

As this edition of the MADA Newsletter went to print, GM dealers were still waiting for written confirmation and details of the reinstatement offer. Also, Chrysler has shown no inclination to back off from any of its terminations. Five Minnesota Chrysler dealer arbitrations are proceeding.

MADA and several Minnesota Toyota dealers met with U.S. Senator Amy Klobuchar’s staff to discuss Toyota’s recent recall problems.

 

Senator Klobuchar is a member of the U.S. Senate Committee on Commerce, Science and Transportation.   The committee held a March 2^nd hearing to discuss Toyota’s recalls and the Government’s response. That committee took testimony from U.S. Secretary of Transportation, Ray Lahood, David Strickland, Administrator of the National Highway and Traffic Safety Administration (NHTSA), and several executives of Toyota Motor Company. Congress has recently held a series of hearings on the Toyota safety issue, and is considering serious reforms of NHTSA and federal auto safety laws aimed at preventing similar problems in the future.

 

In light of the Senator’s interest in the Toyota issue due to her membership on the key committee, Minnesota dealers sought a meeting to make sure Senator Klobuchar was aware of how the negative news about Toyota products affects sales and employment in Minnesota. Dealers also expressed their recognition that the Senator indeed has a responsibility to question NHTSA and its relationship with those it regulates. However, dealers also asked the Senator’s office to consider and question whether Toyota has interacted with federal regulators in a manner that other automakers have not.

 

Senator Klobuchar has questioned whether NHTSA was aggressive enough in investigating Toyota and whether allowing former NHTSA employees to work for auto manufacturers is proper. The Senator has noted publicly the harm caused to both consumers and local auto dealers because federal regulators did not respond quickly enough to safety concerns. 

 

MADA thanks Senator Klobuchar for her willingness to consider the effect of this issue on Minnesota dealers.