Top Democrats Urge Obama to Spare Car Dealers

Posted June 8, 2009 at 1:55pm

Leading House Democrats are pressuring President Barack Obama to ensure that profitable car dealerships stay in business as Chrysler and General Motors brace for structured bankruptcies.

House Majority Leader Steny Hoyer (D-Md.) and Democratic Congressional Campaign Committee Chairman Chris Van Hollen (Md.) on Monday signed onto a bipartisan letter to Obama urging him to restore about 2,000 auto franchise agreements to Chrysler and GM dealers.

“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,— the letter states.

Lawmakers questioned the criteria that Obama’s auto task force is using to determine which dealerships should be closed. “While we understand the desire to reduce the number of unprofitable dealerships, no one has yet sufficiently explained the need to close profitable dealerships,— the lawmakers write.

About 100 Democrats have signed onto the letter, along with a handful of Republicans, including Reps. Steven LaTourette (Ohio), Anh “Joseph— Cao (La.) and Leonard Lance (N.J.). The letter is being sent to Obama on Monday evening.

Two lawmakers who signed the letter — Reps. Dan Maffei (D-N.Y.) and Frank Kratovil (D-Md.) — on Monday introduced legislation to halt the forced closure of profitable dealerships.

“Forced, arbitrary closure of dealers by manufactures will not necessarily be financially beneficial to automakers, and it certainly will not help the local economies where dealers are integral to the business community,— Maffei said in a statement.

Kratovil and Maffei are freshmen and potentially vulnerable in 2010 and their decision to introduce the bill was likely endorsed by House Democratic leaders, who have allowed newcomers to carry popular legislation.