Shuttered Car Dealers Voice Rage, Anguish
Lawmakers grill GM and Chrysler on the wisdom of closing auto dealerships.
June 12, 2009 -- House lawmakers put executives from General Motors and Chrysler in the hot seat today as they questioned the wisdom of closing auto dealerships around the country.
"Since American taxpayers now own 60 percent of General Motors," Rep. Greg Walden, R-Ore., said, "we have a right to know just how the decisions affecting our constituents are made."
GM and Chrysler are shedding dealers as they enter bankruptcy and emerge as new companies. This week, 789 Chrysler dealers were shuttered, and a similar fate looms for 1,350 General Motors dealers before the close of next year.
The House Subcommittee on Oversight and Investigations pushed for answers from the same executives who testified to a Senate committee last week.
"1-800-CAR-TSAR? What number do I need to call to help the dealers that have been so badly hurt?" Rep. Mike Burgess, R-Texas, asked of the auto executives. "Just tell me the telephone number I call?"
Chrysler Deputy CEO Jim Press testified that the cuts "were the most difficult business action" of his career; he also blamed them on dealers, saying, "Eighty percent of them were below their minimum sales responsibility, which translated into 55,000 lost sales, $1.5 billion in lost revenue."
The endangered dealers expressed anger, frustration, disbelief and some nearly were in tears.
Daniel Keikenapp, a Dodge dealer from Tacoma , Wash., told the subcommittee his dealership had been valued at several million dollars, employed 71 people, had been ranked No.1 in Western Washington by Chrysler, but now was "being turned into a used car lot and neighborhood repair facility."
The impact would be felt in his community, he said.
"Thirty-five faithful and loyal, long-term employees have lost their jobs, and Pierce County and the state of Washington have lost a payroll of approximately $1.3 million per year," he added.
"The sacrifices -- all painful -- that we are all making," said General Motors CEO Fritz Henderson, "are necessary to put GM on a brighter path to long-term viability and success. We owe this to the U.S. taxpayer."
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