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Senate To Grill CEOs On Dealer Closings

From a trusting Reuters:

GM, Chrysler to face Senate scrutiny on dealers

By John Crawley

WASHINGTON (Reuters) – General Motors Corp and Chrysler LLC, both bankrupt, will try on Wednesday to ease congressional concern, and in some cases anger, over their plans to slash more than 2,400 dealerships.

Members of the Senate Commerce Committee plan to grill GM Chief Executive Fritz Henderson and Chrysler President Jim Press about the lone aspect of restructuring that has triggered a broad response from Congress since dealers are nationwide.

"Rapid dealer reductions increase unemployment, threaten communities and decrease state and local tax revenue without any material corresponding decrease in an automaker’s costs," said John McEleney, chairman of the National Automobile Dealers Association who sells vehicles made by GM, Toyota Motor Corp and Hyundai Motor Co in Iowa.

At risk are dealers at both companies that employ more than 100,000 people, industry estimates show

On Monday, a bankruptcy court judge in New York approved the sale of substantially all of Chrysler’s assets to a group led by Italy’s Fiat despite objections from dealers and other groups that Chrysler was moving too fast.

The court must still approve Chrysler’s dealership strategy…

That plan must also be approved by the judge overseeing GM’s bankruptcy.

More than three dozen lawmakers in both the House of Representatives and Senate have asked the Obama administration to intervene on behalf of dealerships.

The U.S. government will own 60 percent of GM and 8 percent of Chrysler once their restructurings are complete. Both will be privately held for the foreseeable future.

Additional help for dealers beyond government money intended to help them finance floorplans is not out of the question, according to Sen. Carl Levin of Michigan.

"There may be a remedy that has not been considered yet," Levin told reporters.

However, Levin said a legislative solution was unlikely.

Why would the very powerful Senator Carl Levin – of Michigan – be so quick to pronounce that “a legislative solution” is unlikely?

As the article notes, the government owns a large chunk of General Motors and Chrysler. And of course both have received billions in government largess.

They aren’t any too shy about legislating salaries and bonuses.

Normally, Congress has no problem whatsoever legislating what goes on in the private sector, even in business that have not received a nickel from the US Treasury.

Why this sudden modesty?

Unless all of this purported “Congressional concern” at the dealership closings is just a sham to salve some angry constituents.

Which, we suspect, is exactly the case.

This article was posted by Steve on Wednesday, June 3rd, 2009. Comments are currently closed.

21 Responses to “Senate To Grill CEOs On Dealer Closings”

  1. pdsand says:

    Why go through the CEOs? Why not just ask Obama directly, or themselves and their staffers that serve on the committees that are directing GM and Chryser’s every action? It seems inefficient.

    • Right of the People says:

      It’s to “fool” the voting sheeple who voted these bozos into office with the pretense that they care. When the Government Motors Barrymobile comes out, they won’t bother with dealerships, they’ll probably market it through Sears and Target, batteries will not be included. Or even better, they’ll get Billy Mays to market it on the tube and on the Internet along with Sham-Wow. In fact they’ll probably toss in a couple of Sham-Wows and a Popeil Pocket Fisherman with every Barrymobile.

  2. proreason says:

    A Congressional grilling!!

    Well alrighty then. We’ll get to the bottom of this one in record time!!!

    And if any wrong-doing was done, then the CEO’s and/or any republicans involved will pay the price.

    Obamy and the country’s watchdogs in Congress will see to that.

  3. catie says:

    Hmmh, they’re still silent about the murder of Pvt. Long and we expect them to do something about the fact that more Republican dealerships that were making money were closed down than dim dealerships that were losing money. Yeah, right.

  4. Petronius says:

    About those hearings. Somebody remind the CEOs to drive down in their hybrid subcompacts. And don’t forget to bring their kneepads. And make sure the kneepads are union made.

  5. Reality Bytes says:

    I’d like to see an ethnicity & party affiliation list of the closed dealerships.

  6. Rusty Shackleford says:

    Bein’ as this’ll be my first rodeo, ever, I will watch closely how this goes.

    (sarcasm)

  7. MinnesotaRush says:

    “There may be a remedy that has not been considered yet,” Levin told reporters. However, Levin said a legislative solution was unlikely.”

    There was a very viable remedy to the auto industry’s difficulty when it started and it WASN”T thye “legislative solution”. The viable one was for o-blah-blah and gang to stay the hell out of it!

    NOW .. they’ve created a HUGE problem that isn’t going to get any better soon at all. On the contrary, it will worsen.

  8. BK says:

    People need to consider the coming “Nationalized CAR care”. How can these dealers left keep up with huge increase in car maintenance? Will you call ahead of time and make reservations for sometime in the future? Will your car sit at the dealer’s for days on end waiting for it’s turn to be repaired?

    • proreason says:

      “Will your car sit at the dealer’s for days on end waiting for it’s turn to be repaired?”

      government………..unions…………hmmm…………it’ll take a while to cipher that one

      I’ll ponder it when I’m in lines at the Drivers License Bureau.

  9. aprilnovember811 says:

    http://atlasshrugs2000.typepad.com/atlas_shrugs/2009/05/car-theft-white-house-car-czar-married-to-democratic-fund-raiser.html
    CAR THEFT: White House car czar married to Democratic fund raiser

    Maybe this will answer some questions for them. I’ll have to send this to some of those doing the questioning.

  10. Odie44 says:

    Gee, what a surprise, publically announce dealerships are closing, then figure out why and which ones are closing in a faux “outrage” AIG bonus redux.

    Tail Wag the Dog Bambi style.

    I wonder what the CEO’s are geting out of it behind the scenes. I know a good amount of CEO’s for large company’s – and “modesty” rarely comes to mind, though “ego” does…

    Just another example of complete morons, with zero business acumen, at the helm of a business entity.

    And I dont think investigating these dealerships will be difficult – just ask them to come forward and show why and how they should remain in business – and their political leanings, but thats exactly what Bambi fears. It would be wise from a PR standpoint for any successful dealer to shout loudly that they are running their business properly, will be around to offer warranty services and model choices. I would buy from that guy.

  11. proreason says:

    “I decided then,” said the first person in chief, “that if GM and their stakeholders were willing to sacrifice for their companies’ survival … then the United States government would stand behind them.”

    Guess what. That isn’t a proreason parody. It’s what the boy-king actually said.

    Barack Hussein Obama didn’t consult with congress, didn’t solicit the American public, didn’t check with his Cabinet. He and he alone made the decision.

    Hitler didn’t need his generals. Stalin didn’t need his advisors. And neither does The Moron.

    Here’s the full article about it:

    http://townhall.com/columnists/TerryJeffrey/2009/06/03/i,_barack_obama

    Also interesting is that His Majesty used the word 34 times in his brief remarks. He used the word “law” once. and “congress” zero.

    Now why would he trouble himself saying “law” even one time?

  12. proreason says:

    Hot off the proreason press!

    (pr) Just in, this reporter has been granted an exclusiv advanced report of the Government Motors 2012 pelosi GTxi SS/RT Sport Sedan.

    Never be late for the day labor shelter again.

    http://www.youtube.com/watch?v=rAqPMJFaEdY

    note: hat tip to the futile brain of IowaHawk

    Don’t miss the video of the crash test!!!

  13. Moonspinner says:

    But I thought Obama himself was picking the dealerships to be closed. I do know one huge dealership in my state, a Chrysler/Jeep dealership which has been in business for 65 years received notification they are to be closed. This is a very successful dealership, not a barely making it dealership. The owners of this dealership were totally shocked over it. It made big news in my state (Arkansas) as this is a very well known dealersihp. Obama is an idiot!

  14. Colonel1961 says:

    If I’ve made this comment before, mea culpa. Our local Chrysler dealership was just closed. It was owned by the grandson of Sen. John Sparkman (Adlai Steveson’s ’52 running mate) and he’s a yellow dog dem of the highest order and involved in dem politics at every level. The idea that these closings are completely political is less than certain in my mind…

    • spiffyw says:

      It is plain stupid
      Because you are a single dealer then you’re gone even though sales are good is nutz !
      The choice was made Not by Management, but Government …
      That is political right or Wrong

    • Colonel1961 says:

      Not saying it’s not ‘nutz’, just saying, perhaps, it’s not political…

    • proreason says:

      I agree with the Colonel.

      There isn’t any clear evidence it’s political, yet, so there might well be some obscure business reasons for the closings.

      But with the knee-breaker revenge-driven facists gleefully in charge, my hunch is there was a lot of politics involved, and I hope the people who have the means to find out are hard at it.


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