Friday, June 12, 2009

Dealer Closings Questioned

U.S. House members vented their frustration at General Motors Corp. and Chrysler Group LLC’s dealer closings Friday, demanding a fuller explanation of how the automakers made their choices and whether they would save any money.

As they did in a previous Senate hearing, executives from both automakers defended their decisions and the methods they were using to aid dealerships targeted to close, saying only a handful of dealers had refused help.

But lawmakers aggressively questioned the rationale and motivations behind the cuts, criticizing them as uncertain and unfair. Rep. Greg Walden, R-Ore., played a computer animation showing the 136-mile drive that GM customers in Burns, Ore., will now have to make to reach the nearest GM dealer for service.

“We have yet to get a clear answer on how this so-called rationalization will save the automakers and taxpayers money,” Walden said.


I am very sorry that some longtime family businesses had their franchises taken away, that dealership employees lost their jobs and that communities are facing the burden of more shuttered retail locations.

But this had to be done.

One of the US auto industry's biggest problems of the past few years was that they had way too many retail locations. The objective of the bankruptcies of Chrysler and GM is to correct their problems.

That would not be accomplished without severe cuts in the number of dealers.


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