Enforceability of an Arbitration Agreement depends upon the jurisdiction you are located in and how the Agreement is drafted.  There are many factors to consider, but here are a few of the major ones:  Are there one-sided provisions?  Are the costs to the consumer excessive?  Which parties claims are covered and are they mutual and consistent?  What are the rules for the arbitration proceeding?  Notice to the consumer that certain rights to file suit or participate in a class action are waived.

At least 100 GM dealerships will be reinstated, Whitacre says
By: Chrissie Thompson, Automotive News

DETROIT — Ed Whitacre, General Motors Co.’s chairman, expects at least 100 GM dealerships will be restored in the arbitration process mandated by a new federal law. “I think a large number will get reinstated,” he said today in a meeting with reporters. “I think that’s a given. It’s in the hundreds.” The law, signed by President Obama last month, sets up a six-month period in which dealers can appeal their rejection to neutral arbitrators. Dealers have until Jan. 25 to give notice that they intend to file for arbitration.

An arbitration judgment must be handed down by June 15. In bankruptcy last year, Chrysler rejected 789 dealerships, while GM said it would wind down 1,350 through October 2010. GM used a “pretty arbitrary” cut-off point in choosing which dealers to reject and probably made some mistakes by cutting some good dealers and leaving some bad ones, Whitacre said. “The way it came out, if you fell above or below a line, you were removed,” he said. “But you had to do it that way. You can’t just go around flipping coins, so you had to have a process.” It was impossible for GM to have a perfect process, he said.

Arbitration could restore good and bad dealerships, Whitacre said. “The bad thing would be if they’re a lousy dealer that has a lousy storefront and through some process they’re put back in arbitrarily,” he said. “If they’re a good dealer and would really push GM in a classy manner, like we want it done, then it would be really good.”

Won’t hurt profits
Restoring dealers won’t jeopardize GM’s profits, Whitacre said. He thinks GM will be profitable in 2010. “You want to be a profitable company, and I think everything else just sort of flows from that — numbers of vehicles, how many fleet, how many in retail,” he said. “We’ve kind of restructured, put our priorities in the right place.” He said he does not feel pressure to take GM public this year. If the company does have an initial public offering in 2010, it would be late in the year, he said.

Terminated Chrysler Group dealers have until January 25th to notify the company of their decision to seek arbitration, according to a letter sent last week to owners of all 789 rejected dealerships. The letter, sent by Chrysler pursuant to the timetable in legislation mandating the arbitration, does not spell out the criteria used to reject the 789.

Chrysler will outline those criteria in individual letters to dealers that it will send before January 16th, according to Chrysler spokeswoman Kathy Graham. The dealers lost their franchises June 9 at the end of Chrysler’s six-week government mandated trip through U.S. Bankruptcy Court.

The arbitration process was signed into law December 16th by President Barack Obama as part of a $446 billion appropriations bill. The legislation also affects General Motors which is terminating 1,350 dealerships.

Spokesman Greg Martin said GM is working on its “administrative next step. We plan to communicate with dealers soon.” The legislation requires that arbitration must be wrapped up in six months. Chrysler said in the form letter last week that it is “assessing its rights and remedies” with respect to the legislation.

Speaking to reporters at a company event Dec. 17, CEO Sergio Marchionne said restoring some of the large numbers of franchises could “cause havoc within Chrysler.” Earlier in December, Chrysler had proposed its own binding arbitration process to keep Congress from getting involved. But the negotiations ended with the introduction of the legislation. Marchionne said Chrysler’s offer would have “guaranteed a disgruntled dealer the opportunity to air its concern. Having said this, if Congress wants this, Congress gets this. And we’ll live with the consequences and react accordingly.”