DOJ: News Release

Bullock Objects to Provisions of GM Bankruptcy

AG says Montana dealerships and consumers shouldn’t be forced to give up legal protections

HELENA – Attorney General Steve Bullock has joined in two objections filed in the General Motors (GM) Bankruptcy proceedings on behalf of consumers in Montana and 36 other states. The federal court actions come after GM’s recent claims that it can ignore state laws that make sure dealerships get a fair shake from the company and that consumers’ rights are protected when a GM product is defective.

General Motors is attempting to circumvent state laws designed to protect auto dealers. GM, which will be majority-owned by the federal government, insisted that current dealers — including Montana’s 47 franchises — sign a new dealership agreement if they want to be part of the new operation. The new dealership agreements would give the restructured GM complete control over the dealers beyond anything that would be allowed by state law. The new agreements amount to take-it-or-leave-it ultimatums that force current dealers to waive state laws that were enacted to protect them. If dealers don’t sign the new contract, they will lose their business.

Bullock said that, as a large, rural state, dealerships in Montana are already disproportionately affected by GM’s proposed closings.

“Local auto dealers are an important part of what keeps many of our small communities going,” Bullock said. “If we lose dealerships, some folks in rural areas are going to have to drive hundreds of miles just to get their cars or trucks serviced.”

GM has also sought permission from the bankruptcy court to void any claims under state law for GM products sold prior to the bankruptcy that prove to be defective.

“Montana’s laws protect consumers from cars that turn out to be lemons. They also require car manufacturers to provide compensation when their products are defective and cause injuries,” said Bullock. “GM should not be allowed to duck our consumer protection laws.”

State laws regulating auto dealerships, including the relationship between dealers and manufacturers, are found in the Montana Code Annotated Title 61, Chapter 4, parts 1 and 2, and the lemon law protections are in part 5 of the same title and chapter.

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