Patterico’s Pontifications
6/6/2009
More Questions About Dealergate
Filed under: Economics, Obama — DRJ @ 6:58 pm
[Guest post by DRJ]
Democrats are expressing concerns about the GM and Chrysler dealers selected for termination:
“Closing these dealerships will put over 100,000 jobs at risk at a time when our country is shedding jobs at an alarming rate. We also question the criteria being used to determine which dealerships should be closed and the fundamental fairness involved in this effort. It is our view that the market [sic] rather than leaving it up to the manufacturers whose poor leadership contributed to their demise. Furthermore, we believe car dealers will be key players in any effort to revive the American auto industry.”
This is an excerpt from a letter circulated by House Majority Leader Steny H. Hoyer and Reps. Chris Van Hollen and Daniel Maffei. The letter has reportedly also been signed by Senate Majority Leader Harry Reid.
The last line of the letter notes they “may consider legislative proposals to ensure that dealers and their employees are treated fairly.” The full text is below the “more” link.
In a related development, Rep. Barney Frank convinced the GM CEO to keep the plant in his district open for at least 14 months.
– DRJ
The text of the letter:
Dear President Obama:
We are writing to express our concerns about General Motors’ and Chrysler’s decision to close profitable automobile dealerships across the country, and urge you to ask GM and Chrysler to delay final action on proposed closures pending further review of the decision to consolidate dealerships and the process by which Chrysler and GM selected the dealerships to close.
Closing these dealerships will put over 100,000 jobs at risk at a time when our country is shedding jobs at an alarming rate. We also question the criteria being used to determine which dealerships should be closed and the fundamental fairness involved in this effort. It is our view that the market [sic] rather than leaving it up to the manufacturers whose poor leadership contributed to their demise. Furthermore, we believe car dealers will be key players in any effort to revive the American auto industry.
We believe the dealerships are one of the auto industry’s key sources of strength and the manufacturers should continue to honor their agreements and contracts. The dealerships, and their more than 1 million employees, form personal relationships with customers that often contribute to brand loyalty and will be key to General Motors’ and Chrysler’s recovery following this economic downturn. While we understand the desire to reduce the number of unprofitable dealerships, no one has yet sufficiently explained the need to close profitable dealerships.
We recognize that efforts by your Auto Task Force prevented the total liquidation of General Motors and Chrysler, as well as their dealership networks. We commend your efforts to help these businesses survive these challenging economic times.
However, we are concerned that manufacturers are closing profitable dealerships to circumvent current contracts which could require expensive buy-outs under normal conditions. We are also concerned about allegations that dealers that have previously stood up for their rights against the manufacturers are being targeted by these closures. We believe that the forced closures of profitable dealerships needs to be scrutinized by the Task Force to prevent additional future financial loses [sic] to General Motors and Chrysler and job loses [sic] across the United States
We may consider legislative proposals to ensure that dealers and their employees are treated fairly, and we look forward to your timely response. |
