US automakers urged to negotiate with closing dealers

• Source: Xinhua
• [14:20 September 17 2009]
• Comments

A key US Senate leader urged two major US automakers to negotiate a compromise with groups representing more than 2,000 closing dealerships, local media reported Wednesday.

Sen. Richard Durbin from the state of Illinois, who is the No. 2 Democrat in the US Senate, had sent letters to GM president and CEO Fritz Henderson and Chrysler CEO Sergio Marchionne, urging them to reach a deal on the dealership issue "at the negotiating table."

The House passed a spending bill in July that seeks to reverse Chrysler's closing of 789 dealers and GM's planned closing of at least 1,300 dealerships by October 2010.

"While I have not foreclosed the option of supporting a legislative solution to address these concerns, I believe very strongly that these issues can and should be resolved outside the legislative process," Durbin said in the letters.

He urged the companies to "work cooperatively to resolve the concerns the dealers have raised."

"We hope to achieve an amicable, non-legislative solution to concerns raised by dealers," said GM spokesman Greg Martin.

The dealer closings sparked outrage in Congress and at a number of hearings.

GM said it will pay $600 million to the more than 1,300 dealers it plans to shutter. It says the closings will save it 2.5 billion dollars.

Chrysler, which closed 789 dealerships June 9, has warned that its future could be in jeopardy if US Congress reverses its dealer closings.