McCaskill: We must be fair to auto dealers but not “micromanage”
Claire McCaskill
WASHINGTON — The plot thickens for the government-backed bankruptcies of General Motors and Chrysler and the questions surrounding Washington’s new role in the industry grow tougher.
What has been a whirlwind restructuring for the two former auto giants slowed Wednesday afternoon as the Senate Commerce Committee questioned the heads of both companies about the reasons, methods and morals of closing dealers across the country.
Simply put, the auto companies said they are forced to slim down and won’t be making enough cars to keep all the dealers now open. But dealers say cutting back sales staffs doesn’t make fiscal sense because they’re largely independent, self-sustaining entities.
“We are not a cost to Chrysler,” said Russell Whatley, a Chrysler dealer in Texas. “No dealership is a cost to Chrysler, we pay for everything we use and we take all the risk.”
Sen. Claire McCaskill, D-Mo., a member of the committee, was less vocal in her criticisms than some members, but suggested the less government interference, the better — even if that meant questionable closings of dealers.
“I understand the passion and the pain here, but I think we all have to acknowledge that these companies are broke and they’re not going to succeed unless they get smaller,” said McCaskill, who noted that her first husband was a car dealer.
“We’ve got to figure out a way forward that’s fair to the dealers but at the same time I don’t think we can micromanage and insist they stay bigger; that’s why they went broke.”
GM has called for 1,100 dealers to close by October 2010, but Chrysler is working on a much stiffer deadline of June 9.
At several times during the hearing, Senators acted as mediators between the dealer representatives and Fritz Henderson, CEO of GM, and James Press, president of Chrysler.
Press said all 789 of the Chrysler dealers to close had been contacted and told of a plan where dealers to remain open would buy cars from the ones that were closing.
But Whatley said he didn’t hear from Chrysler until Monday, weeks after the closures were announced, and a representative told him the comapny hoped to have a plan for what to do with his left over cars next week — the final week Chrysler would allow him to stay open.
“There’s a disconnect here, Mr. Press,” said Sen. Kay Bailey Hutchison, R-Texas, which elicited laughter and some applause from the audience.
The entire hearing was typical of the kinds of delimnas the federal government has faced as a major stakeholder in the American auto industry. As the companies continue to cut jobs and costs, the question is how much authority lawmakers will choose to take in the coming months.
Not one word about all the Chrysler dealers being dumped being Republican donors.
jjk,
That Republican donor thing thatyou are spewing is a none issue. Didn’t you get the lastest information letting us know that over 76% of auto dealers were Republican donors? Now wouldn’t it make sense then that mopst all the dealwerships being dumped would be considered Republican?
Now why don’t some of you more intelligent Conservatives research and see if there is NONE being dumped who have donated to Democrats. Whew, the stupidity that is plagueing Conservatives and Republicans or is it that they are only ensigting the less intelligent among them?
This piece makes it clear that some of Clinton’s pals made out well with the Chrysler closings!
http://directorblue.blogspot.com/2009/05/dealergate-why-zero-hedges-analysis.html
MillerP,
This has got to be some of the biggest garbage that I have ever seen in attempting to make the claim that dealership owners who donated to Republicans are being singled out unfairly.
Will someone on the “Right” attempting to make this argument please begin making sense by showing us some believable evidence that NONE or very few Democrat donor dealerships are being closed in consideration of the fact that over 76% of the dealership owners are Republican donors? This information is just as readily available as the non-sensible information garbage being thrown around by Conservatives.
Why aren’t you on the “Right” gathering and sharing this information? Well, do anyone truly need to ask? I would prove that you ones just plain refuse to turn away and give up your distorting ways. When you ones do as a whole, I will consider supporting some of you again even though I would vote Republican today to get rid of some of the Democrats out there that need to go away.
Absurd.
Look up McLarty, the Clinton Chief of Staff. All of his competition was dumped. Your math logic doesn’t work it doesn’t even make it a “non-issue” or even a NONE issue, whatever that is. The entire deal is being run out of the White House by a 31 year old, former George Soros protoge with zero business experience and plenty of liberal democrat bias. As far as finding “more intelligent” conservatives, anytime you want to take an IQ challenge, I will be delighted to wager any amount you can afford.
Isn”t the term an “INTELLIGENT CONSERVATIVE” an oxymoron??
………I have a non-political question regarding the dealer closings. It would seem to me that ANY car manufacturer (especially manufacturers that aren’t selling as many cars as they need to) would want all the dealers they can have that are willing to sell and service their cars. Why are GM and Chrysler CLOSING business that sell and service their products?
It would seem to me that a dealer is the one taking the business risk for profit or loss, are there costs to car manufacturers for keeping dealers open that I don’t know?
If anyone can help me understand the economics of this without a including a political diatribe I would appreciate it……..thanks.
Hey D. Walker, what kind of car do you drive? I’ve seen a dozen cars in the past month with “Obama For President” affixed to Hondas, Toyotas, Hyundais, Suzukis. If you want a job as the Democrat party’s mouthpiece, go to work for them. Your dribble is weak.
Give me a break jjk, switch the channel.
On top of everything David Nickleson ‘had’ this story as it was breaking and showing that the Post’s political agenda extends to the business section… refused to print it.
The numbers are real, true and do not lie… add to that ABC carried the story on how both the closing of dealer and which to close came from the white House team overseeing (controlling)Chrysler.
This is a huge story that the MSM is covering up for their master Obama