The attorney general of U.S. state of Texas Friday filed an objection in federal bankruptcy court claiming that General Motor (GM) is trying to force car dealer into contracts that violate Texas law.
"In an unprecedented move, GM -- which will be majority owned by the federal government -- claims that states' rights and states' laws that protect dealerships can be ignored at GM's choosing,” Attorney General Greg Abbott was quoted by newspaper Dallas Morning News as saying.
Abbott alleged in a statement that the GM contracts free itself from Texas law limiting GM'sability to dictate that a franchise be modified or terminated, deny Texas dealers' legal rights to sell other brands and force them to order new GM cars even if they do not believe the vehicles will sell.
Other allegations are that GM is trying to limit Texas dealers' warranty claims and is seeking to dodge Texas law that allows dealers to protest the opening of another dealer if it is located within the same county or within a 15-mile radius and carries the same line-make.
The Detroit-based company is rushing through its Chapter 11 bankruptcy filling. According to the Texas Automobile Dealers Association, there are 415 franchised GM dealers that employ 27,000 people in Texas.