Helping car dealers move on (new law)

The precarious economic situation for U.S. auto manufacturers is affecting local car dealerships not only in lower sales, but through contracts they have with the model supplier.

The goal of a new law, according to House sponsor, Rep. Joe Atkins (DFL-Inver Grove Heights), “is to help car dealers survive in this difficult time.”

Signed by Gov. Tim Pawlenty May 6 and effective the next day, the law will help dealerships be adequately compensated if their franchise is affected by actions of the vehicle manufacturer.

The law will:

• require successor manufacturers to offer existing dealers a franchise on similar terms as the predecessor;

• have the manufacturer recognize “blue sky” and compensate the terminated dealer for the value of the franchise over and above the physical assets; and

• allow the dealer to add another line-make to their existing facility.

Sen. Kevin Dahle (DFL-Northfield) is the Senate sponsor.

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