GM, Chrysler defend slashing dealerships

WASHINGTON (AP) — Fighting to survive, top executives from General Motors and Chrysler on Wednesday defended their decisions to slash dealerships around the country, calling the moves unavoidable despite the pain to many loyal dealers and customers.

GM president Fritz Henderson and Chrysler President James Press told the Senate Commerce Committee in prepared testimony that there are too many dealers and the networks date from the 1940s and 1950s when motorists lived farther apart and Detroit automakers led the world in sales.

But after hemorrhaging customers for decades and losing market share to foreign competitors, they said the companies need to scale back all their operations to become leaner and profitable as they operate under bankruptcy protection.

"Reinventing GM - real change - does require shared sacrifice," Henderson said. "These are tough times for everyone in the GM family. And, as part of the GM family, our dealers are also being asked to bear some of the sacrifice in order to build a stronger, more viable GM."

As for GM's smaller rival, "there's not enough business for the number of dealers Chrysler has today, given that we have less than two-thirds of our former sales volume," Press said.

"Poor performing dealers cost us customers. It's true that dealers are our customers, but it works both ways. If they don't sell cars, we don't either."

Committee Chairman Jay Rockefeller, D-W.Va., suggested both companies were abandoning customers and dealers, some of whom had been dealers for decades.

"I don't believe that companies should be allowed to take taxpayer funds for a bailout and then leave local dealers and their customers to fend for themselves with no real notice and no real help," Rockefeller said in prepared remarks. "That is just plain wrong."