Previously GM and Chrysler had arbitrarily notified dealers that their relationship was ending leaving dealers with millions of dollars invested in car stock, no options for consolidation and little leverage for liquidation. There was no transparency to the system that shutdown many profitable dealerships that have been local institutions for decades, and no proof from auto makers that shutting down those dealerships will actually be financially beneficial to the automakers. This legislation builds on the efforts of Congress in a letter sent to the Treasury Department Auto Task Force on May 19, and a letter sent to President Obama today.

Primarily this legislation will:

* Protect Small Business Owners

* Protect Workers and Communities that are invested in these businesses

* Protect Jobs

"Driving up and down Route 50 in Maryland, the landscape is dotted with car dealerships that have locked their doors and emptied their lots," said Congressman Kratovil. "Each one represents dozens of employees left without income or health care, and a major hit to the local economies of these towns. At a time when our nation is reeling from the loss of hundreds of thousands of jobs each month, I can't imagine why we would make the problem worse by forcing hundreds more dealerships to shut their doors. Any dealership that is willing and able to fight through this economic gloom deserves a chance to do so. This bill won't give auto dealers a handout or a bailout -- it will give them a fair shot to survive or fail in the marketplace. That's something every small business deserves."

Congressman Dan Maffei said: "We all recognize that the economy is not favorable to the auto industry right now: we have already seen layoffs from manufacturers and we expect to see many dealerships consolidate and close this year. However, forced, arbitrary closure of dealers by manufactures will not necessarily be financially beneficial to automakers, and it certainly will not help the local economies where dealers integral to the business community. These dealerships employ hundreds of people across my district in good-paying jobs, they sponsor our little league teams and our pancake breakfasts, they have been a cornerstone of our community for generations -- and we are asking that they be allowed to make the best decisions possible for their employees and businesses."

The Automobile Dealer Economic Rights Restoration Act of 2009 does this by:

* Restoring the economic rights of General Motors and Chrysler car dealers as they existed prior to each company's bankruptcies.

* Preserving General Motors and Chrysler car dealers' rights to recourse under state law

* At the request of an automobile dealer, requiring General Motors and Chrysler to reinstate franchise agreements in effect prior to each company's bankruptcies.

* Making clear that the legislation is not intended to make null and void the court-ordered transfer of assets from Chrysler LLC to New CarCo Acquisition LLC or the transfer of General Motors assets that could be approved by a court after the introduction of the Act.