GM’s dealer cull is taking flak from its flanks, as Nebraska Attorney General Jon Bruning has launched a lawsuit to stay the bankrupt automaker’s quivering, zombie hand [download press release here]. In his letter to other state AGs asking for their support, Bruning is not happy with GM’s request that its dealers waive their rights under state law. Specifically, the bit that says “No law of any state or other jurisdiction [go Puerto Rico!], including any bulk sales law or similar law, shall apply in any way to the transactions contemplated by the 363 Transaction, the MPA, the Motion, or this Order.”
Bruning calls New GM’s new dealer terms “unconscionable,” a fancy way of saying he’s getting a lot of heat from politically-connected dealers, and knows a headline maker when he sees one.
Can you say “Anti-trust” violations? Bruning can. If he can enlist Cuomo in New York, Brown in California and Cox in Michigan, this might become the stumbling block to Rattner’s “smooth and orderly process.” As if they need another one. In any case, we’ll see who signs up for this one this week; the objection will be filed by close of play on Friday.
If the secured debt holders and the State of Indiana couldn’t even slow the fed’s roll on the Chrysler Fiatsco, do you really think the feds are going to allow a group of state AGs (least of all just the one who has come out in opposition so far) stand in the way of them purchasing GM? Obama can just mention the fed bail out bucks going to balance the State of California budget, and I’m sure moonbeam (Gerry Brown) will be made to see just how great the dealer agreements are for the dealers, the people, and the environment. Maybe Nancy Pelosi could even loan him her speech writer for a gushing tribute to the GM bankruptcy plan.
While I have no sympathy for GM, the states’ dealer protection racket is contemptible. So, go GM! Blowing up the current dealer system may actually create a new way of doing business.
What would the dealers get under liquidation?
Bruning, like Mourdock, is just another annoying fly buzzing around Obama, ready to get slapped down.
The AGs are stepping in because of GM’s nasty choice to dealers: either waive your rights, or we will terminate you under chapter and publish your identity in court.
If RF would publish one of the dealer letters, many of you would be up in arms over the strong arm tactics employed by your government….it’s a nice extortion move that’s going to cost the taxpayers even more down the road as chain dealers migrate their customers into non-GM vehicles. Penske must be laughing about how easy it is to recruit GM’s best dealers right now….
And yes, it’s the government, not the company, that is running the show. The task force pushed GM to lock their national rep body in a Detroit conference center with approximately 2 lawyers per rep, and run every single email and call by the lawyers up until the deadline for returning the documents.
Sad, but what else would anyone expect given the fact that a 31 YO near lawyer/former intern leading a task force of non-industry types is running the show?
Bruning is, and has always been, quite the attention-seeker, so his motives should be viewed with that in mind.
Bruning is, and has always been, quite the attention-seeker, so his motives should be viewed with that in mind.
So you’re saying we should expect the Nebraska Inquisition?
I find it quite disturbing that under both the previous administration, and the current one, that they feel they are above the law, and they can pretty much do anything they want in the name of “economic or military” security.
This country is supposed be about equality under the law – not if your political connections are strong enough, you get priveledged treatment.
With Chrysler, Obama overturned the tenents of bankruptcy that had been in place since the country’s founding, and was able to bully one federal judge into going along.
Does anything seriously think the debt markets will ever be the same – no one will loan money to distressed companies with political connections.
Anybody who buys a government motors vehicle is slitting their own throats by condoning such attitudes and actions.
taxman,
I am not sure Obama bullied any judge. Had he, I would have thought that at least one of the five conservative SC justices might have pulled the plug on that action by hearing Indiana’s appeal.
I do not have a JD, and I might be a wide-eyed innocent, but I do not see the arm twisting of the judice you do.
Looking at subsequent posts, I should add that I am not approving of nor holding up Jon Bruning as a beacon of light in a world of darkness. I just think its laughable to think that a) he could recruit other AGs to in essence sue the federal government over these forced dealer closures and b) win the case.
@ Srynerson:
That’s the difference, right there: everybody expects the Nebraska InquisitionQ
How has GM supposedly run afoul of antitrust? If anything, GM is trying to get smaller, which makes the Harvard school happy, and shows no ability to monkey with price, which makes the Chicago school happy.