Abbott files objection to GM bankruptcy suit on behalf of Texans - KCBD NewsChannel 11 Lubbock

6/12/09

Abbott files objection to GM bankruptcy suit on behalf of Texans

By Ann Wyatt Little  - bio | email

LUBBOCK, TX (KCBD) - Congress isn't the only group that wants to make sure dealers are getting a fair shake from recent bankruptcy filings. Texas Attorney General Greg Abbott's office took action Friday demanding Texans deserve better from General Motor's bankruptcy suit.

On behalf of Texas GM dealers, employees, and buyers Abbott filed an objection in New York Federal Court Friday questioning GM's bankruptcy plan. He says the new GM contract offered to dealers would violate current Texas law by preventing Texas dealers from selling other brands, requiring dealers to order new GM cars they might not want to sell and alter law regarding dealer locations. The Texas Occupations Code currently provides the legal structure for dealerships.

"General Motors is insisting that current dealers sign a new dealership agreement if they want to be part of the new GM operation. The agreements, however, amounts to a take it or leave it ultimatum that force current dealers to waive state laws that were enacted to protect businesses from these very kinds of oppressive actions," said Abbott during a press conference in Austin.

Abbott says that GM is more focused on the short term turnaround than long-term stability.

"This plan moves the business toward a command economy model and away from a free market model. GM is seeking to place short term profit above long standing principles of the way we do business," adds Abbott. 

According to the Texas Automobile Association there are 415 franchised GM dealers in the state that employ almost 27,000 people.

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