GM Pitting Dealers Against One Another

Posted: Jun 19, 2009 11:18 AM
Over the past couple of weeks, I’ve spoken with the GM and Chrysler car dealerships from my district that have been targeted for total or partial closure by President Obama’s Auto Task Force. They were given no reason, and really no recourse to challenge their closure. It is as if the Car Czar threw a dart at a dartboard to decide which dealerships would be given a pink slip. In fact, we still do not know the formula used to determine which dealers would remain open and which ones would close; which ones would lose certain brands and which would get new brands.

Now, GM is officially pitting dealers against another.  And, remember:  the government owns 60% of GM.  It has committed $50.7 billion directly to GM, plus another $12.5 to their financing arm, GMAC.  When we talk about GM, it’s hard to consider it a private entity.

GM is encouraging their "viable" dealerships to put pressure on Congress to defeat legislation aimed at protecting the hundreds of dealerships across the country slated for closure. I am a cosponsor of this legislation, the Automobile Dealer Economic Rights Restoration Act of 2009, that would honor a car company’s previous commitments to local car dealers.  GM is lobbying for its defeat.

According to the Detroit News:

"GM gave its dealers talking points - and even a telephone script to use while talking to their members of Congress to oppose the measure. Dealers also have access to a toll-free number to help them reach a member of Congress -- dubbed the Dealer Voice Hot Line -- or dealers can e-mail legislators via a company Web site:"

GM maintains that "In order to build a stronger, more viable GM, it is essential to have the best performing dealers, in the right locations, aligned with GM’s brand distribution strategy to be a part of GM’s reinvention."

Yet many of the best performing dealers are the ones GM is shutting down. The government is playing politics with private enterprise, and sadly, family businesses across the country are the ones taking the hit.

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