GM chief to U.S. Senate: ‘This is our last chance’

WASHINGTON (AP) — The chiefs of General Motors and Chrysler told skeptical lawmakers on Wednesday they have too many dealers to support their slimmed down operations, and sacrifices must be shared as they fight to overcome bankruptcy and survive. They acknowledged that slashing dealerships is causing pain in communities around the country.

“This is our last chance to get it right,” GM President Fritz Henderson told the Senate Commerce Committee. He said these were “tough times for everyone in the GM family.”

Chrysler President James Press told the panel his company was “working hard to achieve a soft landing” for dealers. But if underperforming dealers aren’t selling cars, the company can’t return to profitability, he said.

Committee Chairman Jay Rockefeller, D-W.Va., suggested both companies were abandoning customers and dealers, some of whose families have been in the business 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 plan, no real notice and no real help,” Rockefeller told the automakers. “That is just plain wrong.”

Those dealers “are looking into a black hole right now,” while companies seem to be implying “that the dealers themselves are responsible for the companies’ problems,” Rockefeller said.

More than 2,700 dealerships are in line to lose their franchise. Two small-town dealers invited to appear before the committee spoke of the anguish ahead.

Russell Whatley, a Chrysler-Dodge-Jeep dealer in Mineral Wells, Texas, said his grandfather opened the business in 1919. “A 90-year investment is just gone,” he said. He called Chrysler’s actions “wasteful and devastating.”

Peter Lopez, a GM and Chrysler dealer in Spencer, W.Va., said he had met every financial obligation put forth by Chrysler and GM but still “they want to shut me down.”

“I am the face of GM and Chrysler in my town,” he said. “It’s unbelievable how we have been treated.”

The executives of the struggling companies said there are too many dealers, with many representing the same company often competing with one another for sales. Auto officials claim many of the dealerships date to the 1940s and 1950s, when motorists lived farther apart and Detroit automakers led the world in sales.

After hemorrhaging customers for decades and losing market share to foreign competitors, the two automakers said their companies need to scale back all their operations to become leaner and to hopefully return to profitability.

Chrysler is expected to emerge from bankruptcy protection within the next few days. General Motors filed for Chapter 11 protection on Monday and its officials said they hope to be able to emerge as a new company in 60-90 days.

Lawmakers argued that the dealership closings will put thousands of people out of work and offer few savings to GM or Chrysler, which have received billions in federal aid as they attempt to restructure and return to profitability. The industry, in response, says taxpayers’ investment is best protected by shedding unprofitable operations and strengthening the bottom line as fast as possible.

“It’s not our place to change your decision,” Sen. Kay Bailey Hutchison, R-Texas, told the auto executives. “But it is our place...to make sure that everyone is treated as well as can be in these circumstances.”