It’s up to the automakers to decide on dealerships

Long Island Newsday: “Their oversight is just too extreme,” former Chrysler CEO Lee Iacocca recently remarked about operating under government supervision. He’s urging automakers to pay back their loans as quickly as possible, but Congress should listen, too. A House bill requiring General Motors and Chrysler to reinstate recently canceled franchise agreements with hundreds of dealers is just the sort of meddling that Washington should avoid.

Business executives

Decisions about how to restructure the companies should be made by business executives with a hard eye to the automakers’ survival, not by elected officials worried about whose constituents get hurt. These are tough times for auto dealers. But GM and Chrysler have more dealerships than their diminished sales can support. Chrysler will shutter about 800 dealerships leaving it with 2,300. GM plans to close 1,280 by October 2010, leaving 3,500.

Dealers say because they’re independent, putting them out of business won’t help the automakers. But GM puts the cost of the support, training, advertising and more that it provides dealers at $1,000 per vehicle. Automakers should soften the blow for dealers in every way possible. And dealers that are shut down should be compensated appropriately. But those terms should be up to automakers, dealers and the bankruptcy court — not Congress.