Arent Fox Is Driving People To Work

    August 21, 2014

    In the spring of 2009 General Motors and Chrysler — two long-time titans of the business world and symbols of American economic power — filed for bankruptcy. Chrysler LLC was the first to file on April 30, 2009. Less than two months later, General Motors — the largest automaker in the United States and the world’s second largest — filed a 24-page bankruptcy petition on June 1, 2009. It was the second largest industrial bankruptcy in history.

    Watching — and waiting — to see what the bankruptcies of Chrysler and GM would mean to them were thousands of Americans who earned their living selling GM and Chrysler vehicles to consumers at auto dealerships all across the country, and workers in the auto parts industry who supplied the dealerships.

    Even prior to filing for bankruptcy, General Motors had announced plans to shut down 2,600 of its 6,200 dealerships in the United States. Chrysler had already begun to eliminate nearly 800 dealer-ships.

    Dealership owners, salespeople, factory workers, and support staff all faced the loss of their livelihood as a result GM and Chrysler’s plan.

    In June 2009, a group of automobile dealers banded together to battle for their businesses and protect their employees, creating the Committee to Restore Dealer Rights. The newly created Committee turned to Arent Fox to craft an ambitious piece of proposed legislation titled the Automobile Dealer Economic Rights Restoration Act of 2009. The bill, if enacted, would restore the economic rights of dealers whose businesses had been targeted for elimination by requiring that the automakers honor and reinstate the franchise agreements.

    The proposed legislation was the first component of an intricate legal, legislative, and communications strategy that would be waged by Arent Fox to roll back the dealer terminations.

    The multi-pronged Arent Fox strategy began paying dividends almost immediately. The Automobile Dealer Economic Rights Restoration Act of 2009 garnered 284 co-sponsors in the US House of Representatives and 48 co-sponsors in the US Senate. Arent Fox directed and implemented a government relations effort that involved flying in hundreds of dealers to meet with Congressional leaders and holding a press conference at the Capitol with House Majority Leader Steny Hoyer and numerous other key Members of Congress in support of the dealers.

    Arent Fox attorneys served as the primary negotiators for the Committee to Restore Dealer Rights during months of behind-the-scenes negotiations with senior executives from Chrysler and General Motors, facilitated by senior Members of Congress.

    The media soon took note of Arent Fox’s work on behalf of the other beleaguered car dealers, with The Washington Post, Fox News, Bloomberg and The Hill reporting on the proposed legislation.

    After months of negotiations and public hearings, Congress approved the legislation, which was then signed into law by President Obama on December 17, delivering an early and much-needed Christmas present to thousands of American workers who faced the loss of their jobs and businesses.

    The legislation established a unique binding arbitration process that would take place in the first half of 2010, giving dealers the opportunity to regain their franchises. Thanks to the legislation designed by Arent Fox, the dealers would have the unprecedented opportunity to make the case to neutral arbitrators that their dealerships should remain open.

    Passage of the landmark legislation was the result of sustained extraordinary efforts by Arent Fox. To read more about Arent Fox’s campaign on behalf of the Committee to Restore Dealer Rights, which was later selected as one of the “Top 10 Lobbying Triumphs” of 2009 by The Hill, please click here.