AG takes aim at General Motor's push for new dealership contracts

Chris Rizo Jun. 5, 2009, 8:57pm

Buddy Caldwell (D)

BATON ROUGE, La. (Legal Newsline) -General Motors Corp. is trying to foist a new contract on dealerships that will harm consumers and violates state law, Louisiana Attorney General Buddy Caldwell said Friday.

After hearing from the Louisiana Auto Dealers Association and the Louisiana Motor Vehicle Commission, Caldwell said he is looking into claims of unfair trade practices on the part of the troubled Detroit automaker.

The Democratic attorney general said he will look into claims that General Motors, which filed for federal bankruptcy protection this week, is trying to create a system under which its dealers operate in the marketplace without almost any of the existing Louisiana regulations that guarantee a level playing field.

The troubled automaker has asked its dealerships in the Bayou State to execute a modification of their franchise agreements. The revised contract has provisions to force GM dealerships that sell other car brands to jettison those lines and sell GM brands exclusively.

Caldwell said the agreement would run roughshod over the regulatory plan legislatively implemented in the state.

"The consumers are the ones who will suffer," Caldwell said. "This will cause serious harm to Louisiana citizens because car dealerships are a critical part of our communities. They sponsor our kids in Little League, they give sponsorships to our schools, and they contribute to our overall sales tax and revenue. I can not stand by and allow this to happen."

Caldwell said his office will take part in a teleconference with other state attorneys general on Monday to discuss the GM bankruptcy.

From Legal Newsline: Reach staff reporter Chris Rizo at

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Louisiana Attorney General
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