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NADA, GM Discuss Terms for New Franchise Agreements

June 09, 2009

DETROIT — Representatives of the National Automobile Dealers Association met with General Motors LLC officials last week to discuss new franchise agreements for the automakers' surviving dealers. The McLean, Va.-based trade association has released a statement indicating that officials there are satisfied that GM is willing to listen to and work with its dealer body.

"I especially commend GM for its flexibility and its willingness to make substantive clarifications and modifications to address dealer concerns," said John McEleney, Iowa dealer and NADA chairman. "We believe GM has made a very good faith effort, given the unprecedented circumstances facing GM and the industry."

Last week, GM sent a "Participation Letter" outlining terms under which dealers must operate going forward — or risk losing their franchise agreements. The 24-page contract included terms that the NADA and several dealers and attorneys complained were too harsh.

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