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State Representative Joe Atkins
100 Rev. Dr. Martin Luther King Jr. Blvd.
651-296-4192
For more information contact: Matt Swenson 651-297-8406
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NEW LAW COMES IN NICK OF TIME TO PROTECT LOCAL AUTO DEALERS
ST. PAUL, MN - Today GM announced it will close 1,100 dealerships nationwide. A new law enacted by the Minnesota Legislature last week may have come just in the nick of time to save local auto dealers millions of dollars. The law (HF1717) authored by House Commerce and Labor chair Rep. Joe Atkins, requires auto manufacturers like GM and others to recoup the cost of local auto dealer franchises in Minnesota should the manufacturer cancel its franchise agreement with the dealership.
“Prior to this bill becoming law, if GM decided to pull the plug on our local auto dealers, those dealerships would get nothing for the value of their businesses they have spent a lifetime building," said Atkins. “All this new law does is require that auto manufacturers live up to their agreements and share in the financial responsibility. This simple measure will help protect local auto dealers all over the state from what can be a devastating financial situation.”
Rep. Atkins worked with both auto manufacturers and local dealers when crafting his bill. There was agreement between all parties that this new law is the right thing to do for small businesses in Minnesota.
“This is a serious issue impacting hundreds of local auto dealers across Minnesota,” said Rep. Atkins. “This new law is meant to protect the local, small town car dealer, their employees, and the customers who buy from that dealer. We need to do everything possible to protect our small businesses right now and the thousands of Minnesotans they employ. In this difficult economic situation, we have a responsibility to look out for the little guy and protect jobs. That’s what this law does.”
Unfortunately the new law may not provide the same protections to 19 Minnesota dealerships Chrysler announced will be closing in the near future. Since Chrysler is in bankruptcy, federal bankruptcy law supersedes Minnesota law. While the bankruptcy judge may recognize the new Minnesota law, those dealerships would likely salvage only pennies on the dollar for their inventory and lost business. Since GM is not in bankruptcy, GM will be required under state law to compensate Minnesota auto dealers for inventory in their possession.
News Items
- Rep. Atkins, Sen. Lourey Introduce Health Insurance Exchange Legislation - (Posted: Jan 9 2013 3:44PM)
- Rep. Atkins – Statement on Deal to End NHL Lockout - (Posted: Jan 7 2013 2:05PM)
- Rep. Atkins to Hold Minnesota House Hearing on Economic Impact of Hockey Lockout - (Posted: Jan 2 2013 3:20PM)
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