Washington » A House panel voted to require General Motors Corp. and Chrysler LLC to restore agreements with auto dealerships shed during bankruptcy proceedings.

A bill approved by the House Appropriations Committee also would require the Treasury Department to disclose more information to lawmakers about the future of the Troubled Asset Relief Program, including how much money the government expects to either gain or lose through the initiative.

The committee last night unanimously approved an amendment to the Treasury Department's 2010 budget that would require the companies to re-establish the franchise agreements as a condition of receiving federal aid.

"I don't think Chrysler or GM has been able to demonstrate there is savings associated with fewer dealerships, since the dealers themselves bear the cost of operating their dealerships with little help from the manufacturers," said Representative Steve LaTourette, an Ohio Republican who sponsored the amendment. "It's the most un-American thing for the government to help force you out of business."

GM spokesman Greg Martin said the amendment would "nullify" bankruptcy court-approved plans to pare the company's dealer network and "put our long-term viability at risk." He said GM intends to close about 2400 dealerships in October 2010, leaving the company with between 3500 and 3800 outlets.

"We simply cannot undergo this sweeping

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transformation without a comparable effort to reshape our retail network," GM CEO Fritz Henderson told a House subcommittee last month.

A Chrysler spokesman did not immediately respond to a request for comment.

 

What's next

The entire House is likely to take up the measure next week. It would also have to be approved by the Senate. Auburn Hills, Michigan-based Chrysler sought bankruptcy protection on April 30. GM, based in Detroit, filed on June 1.

The panel later approved the overall spending bill, which would require Treasury to report by Dec. 1 on whether it plans to make any new TARP commitments after Dec. 31, 2009, "as well as any additional plans, outside of TARP, to ensure financial stability going forward that expose the taxpayers to possible financial losses." That includes any joint initiatives between Treasury and the Federal Reserve, the panel said.