Senator Olympia Snowe Calls on Automakers to Support Dealerships Facing Closures

June 3, 2009 -- Washington, D.C. -- In response to recent news reports of General Motors following Chrysler into bankruptcy, Senator Olympia J. Snowe (R-Maine) today called on the heads of the American automobile companies to ease the transition for the nearly 2,000 small dealerships across the country who face imminent closure.

In a Senate Commerce Committee hearing examining the domestic auto dealership closures today, Senator Snowe highlighted the burden on the national network of dealerships to quickly liquidate inventory in order to receive assistance and called on the automakers to provide more clarity to the closure process.

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"The call for closure of nearly 2,000 small auto dealerships nationwide and more than 15 in Maine looks like another poor management decision from GM and Chrysler," Senator Snowe said. "From giving dealerships little or no time to shed inventory to the extreme lack of transparency to the closure process, these automakers must do more to help the public and the dealers understand and grapple with this painful process that will cost over 100,000 jobs nationally."

As a result of its bankruptcy, Chrysler announced it would be closing 789 dealerships nationwide by June 9th and has given its dealers three weeks to eliminate inventory or be left with no assistance from the automaker. General Motors will slash 1,100 dealerships by October of 2010 without proper clarification of the rationale behind the closures. In total, these closures will result in the loss of over 100,000 jobs nationally, as well as the loss of vital sales tax and other revenues to state and local governments who are in dire need of those dollars.

Senator Snowe questioned the rationale behind the imminent and widespread closures. Citing a shuttering dealership in Sebago Lake, Maine, which sells over $2 million annually in parts alone and serves an area of over 100,000 people, Senator Snowe implored the automakers to consider the market viability of closing dealerships

"The fact is, if GM and Chrysler pull out of these populous areas and leave large geographic areas without the dealer service customers have come to rely on, where there is no service, there are no sales," Senator Snowe said. "How is it that cutting four Chrysler dealerships and at least a dozen GM franchises in my state where over fifty percent of registered vehicles are bought from those two companies is going to help those companies to reemerge from bankruptcy and reestablish viability? The American taxpayer has provided $70 billion to assist these companies -- we deserve answers and the dealers deserve far better."

Source: Senator Olympia J. Snowe