Governor Rell Signs Legislation

Protecting Connecticut Car Dealers

            Governor M. Jodi Rell today held a public signing ceremony for legislation that establishes important protections for Connecticut car dealerships facing an extraordinarily difficult economic climate, especially as American auto manufacturers undergo a painful restructuring process.

            “This economy has been hard on everyone – hard on families and hard on employers,” Governor Rell said. “Businesses like auto dealers are hit especially hard, because when the economy is struggling and people are worried about hanging on to their jobs – or worse yet, finding a new one – they are understandably nervous about buying “big ticket” items like new cars. This bill takes important steps to protect Connecticut’s car dealers and their employees so they won’t get caught in the middle as the worldwide auto industry goes through this period of upheaval.

            “Our state has lost 50 dealerships in the last year,” the Governor said. “About half of them have closed just since the start of 2009. That has cost the state about 2,000 jobs, meaning there are 2,000 families wondering how to keep their lives together, how to pay the mortgage and doctor bills, how to buy food and gas. The loss of these businesses has implications for the state as well, since in normal times we receive about $350 million a year in revenues from sales taxes on car sales. This is an issue that touches us all.”

            The legislation puts in place new protections for dealers so they will not be left in a financial bind for new car inventories, tools or parts when a manufacturer shuts down a product line. In addition, the bill clarifies details of franchise agreements and creates a new system for reimbursing warranty service and labor costs. It also requires payment of the fair market value of the goodwill of a franchise if a product line is shut down.

            “We have already seen Pontiac fade away and lines like Saturn, Saab and Hummer are on the chopping block,” Governor Rell said. “All of these are important protections for Connecticut dealers and they come at a critical time. I thank the Legislature for passing this bill quickly and I am pleased to sign it.”

            The bill is substitute House Bill 6648, An Act Making Revisions to Chapter 739 of the General Statutes with Respect to Automobile Manufacturers, Distributors, Franchises and Dealerships.