Auto Dealers Pushing to Save Car Lots

Posted May 20, 2009 at 6:38pm

The House Judiciary Committee will hold an emergency hearing today on the potential fallout from shutting some 2,000 Chrysler and General Motors dealerships as part of the federal restructuring of the domestic automobile industry.

The hearing, “Ramifications of Auto Industry Bankruptcies,— will include testimony by a local Chrysler dealer, consumer advocate Ralph Nader, Public Citizen board member Joan Claybrook and Heritage Foundation analyst Andrew Grossman.

As part of their ongoing negotiations with the White House’s Auto Task Force, Detroit-based Chrysler and GM both announced late last week that hundreds of dealership locations were being scrapped nationwide in an attempt to revive the struggling companies, which have been dogged for decades by management, union and distribution issues.

General Motors is expected to close about 1,100 dealerships — reportedly almost 20 percent of its total — although it did not say which ones it would shutter. Chrysler will trim 789 — roughly 25 percent of its dealership network.

The precise number of GM dealership closures remains unknown, although many dealers have come forward to say they have been notified. Unlike GM, Chrysler has publicly released a list of the dealerships it will close.

Since the closings were announced last week, more than 100 lawmakers have written to Steven Rattner, who is running the White House panel responsible for salvaging the struggling automakers. The bipartisan bloc of Members are urging Rattner to reconsider the closings, which they claim could cost up to 150,000 jobs nationwide.

“Automobile dealers are one of the largest private sector employers in the United States, providing tens of thousands of local jobs and contributing millions of dollars in tax revenues to states,— reads a May 18 letter to Rattner sent by Rep. Bobby Scott (D-Va.). “Auto dealers are anchors in communities throughout the country and many times ownership is passed down from generation to generation.—

“I respectfully request that the Auto Task Force urge the companies to provide more transparency and justification on forced dealership closures, revisit their decision and consider the damaging effects on local communities,— Scott concluded.

The National Automobile Dealers Association, which could lose 5 percent of its membership from the cuts, brought automobile dealers to town last week.

NADA Chairman John McEleney said Wednesday his group, which represents powerful members of local communities, said dealers have been turning the heat up on lawmakers about the proposal.

“Since dealers received the letters … a lot of them have probably contacted their Members directly,— he said. “We have relationships with [lawmakers]. They work in the district. They all have a car dealer in their district — if not more than one.—