Auto task force warns Congress

[blue_onyx]

The Obama administration warned Congress on Tuesday that a House-approved plan to restore shuttered General Motors and Chrysler dealerships would threaten the auto companies' bankruptcies and recovery.

Ron Bloom, the leader of the White House's auto task force, told a House Judiciary subcommittee that the plan would set a "dangerous precedent" and raise legal concerns that could force the companies to intervene into a completed bankruptcy.

"By all measures, these companies had far too many dealers relative to the number of cars they were selling," said Bloom. He noted that the average Toyota dealer sells four times as many vehicles as an average Chevrolet dealer.


More: http://news.yahoo.com/s/ap/20090721/ap_on_go_co/us_automakers_congress


What is Congress doing? First, GM/Chrysler are told to become competitive. Now that they have taken steps to do so, Congress is backpedaling. Some Congress members were ok with GM/Chrysler going under but were then annoyed when dealers/plants in their state/district were cut. Many Congress members wanted the automakers to be more competitive but, once again, only if it didn't hurt their state/district. They have no idea what they are doing.

[Corvette42]

1. My name notwithstanding, I'm done with GM...

...as long as the G stands for "government". Once they remove their interest in the company, I will consider the company's product again.

[liberal N proud]

2. 200,000 workers unemployed due to dealership closings

I would think that alone would hurt the auto companies.

200000

Two Hundred Thousand


More than 70 effected families at each of the 2800 dealerships that are closed.

[Xithras]

3. Versus how many if the ALL close?

The restructuring is designed to keep GM from folding completely. These dealerships are closing because they are costing GM money and aren't making any. If GM can't reach a break-even point, they'll simply close up shop and have to fire everyone, closing every dealership.

[liberal N proud]

5. And if you don't have a dealership, you can't sell the cars

If I am not a LOYAL buyer of either GM or Chrysler and they close the local dealership and the next closest dealer is a Toyota. I would be buying a Toyota.

It's a catch 22 situation, I know.

[blue_onyx]

4. The auto companies are getting mixed signals

They're told to be more like Toyota but when they make the cuts to do that, people complain. Everyone wants to have it both ways.