GM Sales Chief Mark LaNeve and former GM North America president Troy Clarke, along with Chrysler Deputy CEO Jim Press, spent the day Thursday on Capitol Hill. LaNeve said he was attempting to explain why GM had to eliminate 1300 dealers as part of its restructuring plan.
Chrysler has taken the brunt of lawmakers' disdain because of its decision to close almost 800 dealerships with less than a month's notice while it was in bankruptcy. As LaNeve emphasized to lawmakers yesterday, GM has given dealers through next October to wind down their businesses.
"In terms of creating a viable, competitive GM on taxpayer dollars, you can't look in the mirror and say we didn't have to restructure the dealer body," LaNeve said. "Everybody acknowledges, even dealers acknowledge, we had too many dealers."
He said in order for GM to reach viability, the automaker's dealer network would have to perform as well as Honda's and Toyota's. Acorrding to LaNeve, typical Honda and Toyota dealerships sell three or four times more vehicles per store than GM dealerships.
Chrysler said in a statement that the House bill would "jeopardize the viability of the new company."
Pushed through Congress by dealers, one version of the bill has 221 sponsors in the House, and a vote is possible as early as next week. A bill needs 218 votes to pass. Of the 4100 dealerships GM has chosen to keep, LaNeve says about half have sent letters to lawmakers opposing the bill.
Still, if such legislation is passed, GM will work to honor it. "We don't think it's warranted," said GM CEO Fritz Henderson when pressed on the issue during a press conference this morning. "But if it changes, we'll adapt."
Michigan Representative Gary Peters has proposed an alternative bill, which would use money returned by banks under the $700-billion financial bailout to compensate the dealerships Chrysler and GM have slated for closure.
Source: The Detroit Free Press