GM launches campaign against Ohio Senate bill

May 22, 2010 at 12:00a.m.

By GRACE WYLER

YOUNGSTOWN

General Motors Co. has launched a media campaign against Ohio legislation that would expand the rights of car dealers facing the loss of their vehicle franchisor.

The Ohio Senate bill, introduced by Sen. Mark Wagoner of Toledo, was introduced in November in the wake of the GM and Chrysler bankruptcies. Nearly identical legislation also has been introduced in the Ohio House.

The legislation, slated to go in front of the Senate sometime next week, would require automakers to reimburse dealerships in the event the company ends operations or discontinues a product line.

The Senate bill would hinder GM’s financial turnaround and prevent the company from further investing in Ohio, said company spokesman Greg Martin.

“GM has had significant progress in the past year, and that progress equals jobs and investment in Ohio,” Martin said. “But there are still entrenched political interests at play that have not gotten the memo that GM is a new company.

The United Auto Workers Local 1112, which represents the Lordstown assembly-plant workers, opposes the legislation, said union president Jim Graham.

“There are aspects of the bill that we totally disagree with,” Graham said. “We think it will be detrimental not only to GM but also to Chrysler and Ford.”

GM takes issue with several provisions in the bill, including a clause that would allow auto dealers to sell competitors’ cars alongside GM models, Martin said.

“Almost all of our dealers are good people,” he said. “But there are some that, quite candidly, are not, and they are using this legislation to exploit their political position.”

In addition, under the proposed legislation, auto parts could be sold only by car dealerships, which would prohibit GM from selling its auto parts to other businesses, such as Goodyear, Tuffy and local body-repair shops, Martin said.

The bill also would require automakers to pay compensation — including rent — to closed dealerships, including those that are terminated voluntarily or as a result of the dealer’s “fraudulent activity,” Martin said.

GM will launch its ad campaign Sunday with an advertisement in The Vindicator. The ad touts GM’s recent $350 million investment in the Lordstown Complex, which will begin manufacturing the Chevrolet Cruze this summer.

The plant will add a third shift of 1,200 workers in July.