For many Americans, Summer is the Season of Relaxation...

Wednesday, 10 June 2009 10:54

For many Americans, summer is the season of relaxation - long, lazy days punctuated by family vacations and barbeques. This summer, the opposite has been true for car dealers.

The recession has translated into months of uncertainty and unrest in the auto industry, culminating in the June 1 bankruptcy of General Motors. It has been anything but relaxing. Vehicle sales are down more than 35 percent year-to-date, and, as of the end of May, the SAAR stood at an anemic 9.9 million.

So, instead of a summer of relaxation, dealers are looking at a season of change. Already, multiple bills meant to provide relief to the industry are being debated in Congress. And, last night, one of the most important of these passed through the House of Representatives.

Congresswoman Betty Sutton's Cash for Clunkers legislation, H.R. 2751, was passed by a vote of xxx-xx. The bill, which has been debated in various forms for months, will provide consumers with up to $4,500 for trading in their old clunkers for new, more fuel efficient vehicles. It's a win-win for the auto industry and the environment, and it's been a long time coming. President Obama threw his weight behind a Cash for Clunkers bill back in April, prompting some customers to postpone car purchases in anticipation of its passage.

The bill isn't perfect, far from it. For example, it includes the mind-boggling requirement that qualifying leases must be for at least 5 years. But even so, it will serve as a much-needed shot in the arm for dealers of both domestic and international nameplate vehicles. In addition, it meets the dealers' wishes that the program be simple, stimulative, swift, and short-term. AIADA, representing America's 11,000 international nameplate franchises, now looks to the Senate to complete the passage of this bill, and give customers a reason to return to showrooms.

Meanwhile, as Cash for Clunkers grinds ahead, a few other bills concerning dealers are being kicked around on Capitol Hill. One, H.R. 2743, the Automobile Dealer Economic Restoration Act, is spearheaded by AIADA board member Jack Fitzgerald, and has AIADA's full support. The bill would require Chrysler and General Motors adhere to the franchise rights of their auto dealers. Another, similar House bill sponsored by Steve LaTourette (R-OH), H.R. 2750, would accomplish much of the same goals.

Meanwhile, in the Senate, Bob Corker (R-TN) has proposed the Auto Dealers Assistance Amendment, which would require Chrysler and GM to use any funding they receive from the government during their bankruptcy processes to fully reimburse their closing dealerships for their vehicles and parts.

AIADA will continue to closely monitor these and any other bills that would impact auto dealers. This may not be a relaxing summer, for any of us, but it just might be the summer of recovery.