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House poised to defy Obama on car dealers

WASHINGTON — The House is considering a break with the Obama administration over a key part of auto industry restructuring by pressing General Motors and Chrysler to restore dealerships shuttered by the companies' bankruptcies.

The House was poised to approve the car dealer measure today as part of a spending bill. It would force General Motors and Chrysler to restore franchise agreements with dealers as a condition of partial government ownership.

Car dealers have lobbied lawmakers to support the bill, arguing that the government and the automakers have trampled over state franchise laws and knocked out hundreds of dealerships with little warning. They warn that up to 200,000 workers could lose their jobs.

"An economic recovery will not be possible if we continue to throw people out of work," said Rep. Steve LaTourette, R-Ohio.

GM is reducing its 6,000-dealer network by more than 2,000. Chrysler cut 789 of its dealers as part of its restructuring plan, reducing its dealer count to about 2,400.

The dealership reductions were part of the GM and Chrysler bankruptcy agreements. The government now owns nearly 61 percent of GM and 8 percent of Chrysler.

The White House said Wednesday it strongly opposes the measure, arguing it would "set a dangerous precedent, potentially raising legal concerns, to intervene into a closed judicial bankruptcy proceeding on behalf of one particular group."

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