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Congress Bails Out Auto Dealerships

WASHINGTON: Congress is coming to the rescue of auto dealers facing extinction. The U.S. House of Representatives approved a spending bill last week that included a provision to help auto dealerships affected by the bankruptcies of General Motors and Chrysler. The $24.2 billion bill to fund the U.S. Treasury for 2010 carried a reprieve for the 2,000 or so auto dealerships that both car companies intended to slash in their respective reorganizations. The legislation would require GM and Chrysler to go through state channels to pull dealership franchises.

The Senate version of the Treasury-funding bill has no similar provision so far. Several reports indicated that the Obama Administration opposed the measure, and car company executives criticized it on the grounds of declining auto sales.

Automotive News noted that U.S. auto sales are projected at less than 10 million units this year, compared to an annual average of 16.4 million vehicles through 2008.