The Garden City Telegram
NEW E-Edition!
Subscription
Required
Add Your Comment | Read (1) Comments
AP: Chrysler, GM defend dealership closures
Published 6/13/2009 in Business : Business
WASHINGTON (AP) — Under withering criticism in Congress, General Motors and Chrysler executives on Friday called the closings of hundreds of dealerships painful steps needed to right-size the auto giants. Down-on-their luck dealers said the moves would needlessly devastate their local economies and livelihoods.
"Many dealers and the communities they serve frankly feel blind-sided," said Rep. Greg Walden, R-Ore.
GM CEO Fritz Henderson told a House panel the dealer cuts were "quite painful" but necessary to save over 200,000 jobs at GM's remaining dealers.
"In essence, this is our last chance," Henderson told the House Energy and Commerce Committee's oversight and investigations subcommittee.
Chrysler Deputy CEO Jim Press said the cuts were part of the shared sacrifices by the United Auto Workers union, bondholders and others needed to avoid liquidation.
"Going through bankruptcy was not our choice," said Press, who along with Henderson and the other witnesses were required to raise their right hands and testify under oath.
But the committee heard from shutout dealers such as Frank Blankenbecker III of Waxahachie, Texas, whose voice cracked as he recalled the hard work of his father, a World War II veteran, to build their family business.
"I am glad that he is not alive to witness this travesty. To have risked his life for a country that would do what they are doing would destroy him," he said.
The carmakers' explanations won few converts from House members, who wagged their fingers at the executives and questioned their motivations. Many of the dealers, they argued, had been profitable and received little warning or opportunity to plead their cases.
"There's something wrong with a business model that basically says, 'In order to survive, we've got to crush our local dealers,"' said Rep. Peter Welch, D-Vt.
Found 1 comment(s)!
What is the REAL reason?
We have never heard GM or Chrysler answer the question of specifically, WHY they are closing dealers. Consider: (1) Dealers pay cash for their new cars BEFORE they take delivery; (2) Dealers pay cash for parts for their parts and service depts. (3) Dealers pay their own costs for payroll, real estate, equipment. (4) Dealers make service more convenient for consumers, adding to sales; (5) Dealers pay for a ton of advertising and marketing adding to sales; --------SO WHAT IS THE REASON? They won't admit it, but here it is: Cap and trade and future gas taxes and Obamapolicy may very well force us to buy little unsafe and uncomfortable economy cars like Europeans drive, and manufacturers MUST make a profit on them-----by charging a MUCH higher price than they can with a competitive network of dealers. Buyers will drive a few miles to get competitive prices, but not hundreds, which is where we're headed. THE MANUFACTURERS SHOULD BE FORCED TO ADMIT THEIR REASON IS TO REDUCE COOMPETITION IN ORDER TO RAISE PRICES.
Posted by: Rollin on 6/13/2009