tv [untitled] CSPAN June 7, 2009 12:00pm-12:30pm EDT
discussion -- the approach of going with four core brands, properly resources with all the areas, and with the right-sized dealer body is absolutely the right way to go to market. the most important thing is products, making sure they are outstanding. we will have fewer name plates. . . allows to focus marketing money and attention behind the core brands and distribution to courts. i think the most important thing that we have, a coherent approach to going to market. second, we have a finance company that is now a bank. that bank has not just for general motors obviously for chrysler has the ability to provide financial services to gm dealers and customers and if i think about the situation last fall versus today, and the ability for gmac to provide
competitive products and services, product services and gm dealers and customer, we are away from where we are. confident that we will be a successful partner going forward. the third is we are in the process of right sizing our inventory. our dealer's inventory, given the level of sales experienced in the market, driven large i think our job is to make sure we get our level of inventory in line, maintain it there, so that the inventory pressure situation in our view isn't necessarily given the environment tenable. we need to basically go to market with more equily brie yum! versus the market-sales. so i think it talks about products, customers, financial services that can support that and then finally how we run our production schedules. this is a significant change from what we've historically
been able to accomplish in the past. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2009] >> later federal reserve chair ben bernanke up bathes updates members of congress on the state of the economy. >> today on newsmakers, hilda felice talks about the latest trends in the job market. >> this past wednesday, two days after general motors'
bankruptcy, democrat and republican senators voiced their dispproval of the closing of dealerships and john rockefeller of west virginia is the chair of the commerce and transportation subcommittee. this is three hours, 15 minutes. >> uh, this hearing will come to order. three weeks ago chrysler announced it was going to terminate franchises on a nationwide basis. i spoke with pete lopez, who is here with us. he is not a dealer from -- he
is an autodealer from west virginia, it's not the largest city in the world but it's one of the finest and right in rural west virginia and just sort of sets up the whole tone of this. and he learn that had his contract had been terminated. you know, with chrysler. so obviously he was very concerned about that. we talked on the telephone, and he was, you know, a lot of anxiety and concern and worry about his people, and in a sense in a flash his whole life's work probably of some 30 years or so of taking care of people and servicing cars and selling cars, both chrysler and general motors, you know, all of a sudden it appeared to be very much in jeopardy. so that's the way he felt.
but then compound that, a few days later mr. lopez learn that had g.m. was also going to terminate their franchise with him putting more of his workers at risk. the story is obviously not held to pete lopez. it's a nationwide tragedy. that a lot of us feel very strongly about, something that should not have happened and can be corrected. it's a story certainly that is echoed throughout west virginia nearly on a nationwide basis, you've got nearly 2,000 dealerships closed throughout america, $100,000 jobs at risk. those are not unfamiliar figures but 100,000 people potentially out of work is unhappy. so we have to do better. we can save some of these jobs and we can help some of these
communities, and we have an obligation to do that. let me be very clear. i honestly don't believe that companies should be allowed to take taxpayer funds for a bailout. and then leave it to local dealers and their customers to fend for themselves with no real plan, no real notice, no real help. it's just plain wrong. you don't do that. so we're talking about dealers who have invested everything they have, many who have been in it for many, many decades, a generational thing within families, some of whom are here today. and, you know, they are just looking into a black hole right now. they don't know what's going to happent they don't know why this is this has befallen them. was there pressure? any politics involved? all of this we'll get into this
afternoon. we're also talking about the consumer. people who work just as hard as they can in west virginia and all of our states here, people work uphill all the time striving to make it, to survive. every penny counts. every mile counts, every part of a car counts fit isn't working. but chrysler is eliminating 40% of its dealerships in my state, which is about twice what they are doing on a national average. and g.m. i believe will eliminate more than 30%, which is about 40% more than what or 60% more than what they are doing on a national basis. so this means some consumers in west virginia will have to travel much farther distances to get their cars serviced under warranty, because if you don't have a warranty you can't get your car serviced.
we're going to talk about that too. so basic economics also says the fewer dealerships you have those that are left that are selling chrysler or g.m. products that there's less competition so the price goes up. that's just economics. i think each company has the responsibility to assure this committee that it is not using this restructuring process of unfairly increasing problems on americans who have remained loyal to them again over many generations and many cases and to the domestic auto industry. i want to emphasize today that the consequences of chrysler and gm's actions are very real to so many people in we've w and other states. gm and chrysler, we're hearing from americans every day, and we want you to hear, as i'm sure you have.
we want you to hear what people have to say, and so that's what this hearing is about. so i'm very glad that we have this panel. it's a chance for you to make your case as to those of you who are autoexecutives as to why your companies are taking these actions to tell us what you're going to do differently moving forward if you plan to. my concern runs very, very deep. ien went to west virginia as a vista volunteer, my heart is on main street. that's not politicalically shavement i mean, i really care about those who are always fighting uphill. always fighting uphill, and somehow they never seem to get a fair shake. so these are the most challenging economic times since the great depression. we have to come together and do everything we can to make sure dealers and combles employees do right. i do understand the need for chrysler and g.m. to
re-organize. that's not a question here, but to do it at the the expense of the dealers and the taxpayers is plain wrong. the city and american people lo will not stand for it. i call on kay bailey hutchens. >> thank you mr. chairman. mr. chairman would you allow me to ask every person in the audience who is a dealer to stand? >> of course. >> thank you, very much. we really wanted to see the people who are faceing the issues that we're talking about today. i think, mr. chairman, first of all, thank you for holding this hearing. i think that after the supplemental appropriation week before last, just as i was offering my amendment to try to
extend the time for these chrysler dealers, especially, to be able to shut down their businesses in an orderly way, i got word that you were going to set this meeting for this week, and i appreciate it. because i think we need to hear what is really happening. it's been about 10 days since we had the debate on the floor, and we had the assurances from chrysler that there would be contact with the dealers who were being closed. and i want to set the stage, because it was just that week before last that i was contacted by the -- by some of the dealers in my state that were affected and they received a letter from chrysler dated may 13, 2009, saying that the agreement would be rejected with these dealers. as of june 9.
and that meant about three weeks' notice, and here was the attachment of the letter. as a result of its recent bankruptcy filing chrysler is unable to purchase your newest inventory. chrysler is unable to re-purchase your mopar parts inventory. as a result of its recent bankrupt chrysler filing chrysler is unable to repurchase your specialty tools. some of them have been in operation and have had the burden of paying the taxes, hiring employees, doing business in a community and an employer that's providing a part of -- of this great country were nofede after years of service that they had three weeks and basically no obligation from the company.
so i did introduce an amendment to say 60 days, not three weeks, 60 days. then as we started debating this on the floor, all of a sudden i had five co-sponsors and then 10 and then 15, and by the end of the afternoon, as i was talking to the chrysler executives, we had 38 bipartisans, democrats and republicans co-sponsoring the amendment. and the agreement that came forward from that process was that chrysler would indeed do everything possible and make commitments to the dealers that they would take every piece of inventory and specialized equipment that could be transferred by june 9. and so i look forward today to hearing from mr. press about the progress on that. and i look forward to hearing
from the dealers about whether they believe that they have had that kind of outreach from chrysler. in addition, just this week, general motors has begun its process saying that it would close up to 40% of its dealerships, which would be approximately 2300, give or take, of the dealerships in this country following on 789 dealerships from chrysler. now just to put this in per spesketive, these families from these dealers who have made such an investment and who have taken really the financial burden for these dealerships, they buy the inventory. they take the financial risk, it's a huge burden for those who have stood and those around the country. but we're also talking about 40,000 employees of these dealerships.
so we're talking about 40,000 families besides the dealers themselves, and we're talking about communities, so -- because i remember selling ads for the high school football program in my hometown, and who was the first person to buy that high school football program for the students that came in for their first experience at selling? it was the autodealer in town, and in my hometown we had one. and i remember that. and i know that all over this country people remember that. and united way who is there first supporting the community for those less fortunate? it's the autodealers and their employees, so they are the backbone of the community, and so every community where these ad autodealers are going to be shut down, it's going to see a loss. a loss in revenue of course because the familys are going to have to look for other jobs but also their own charitable and community events will also
suffer. so i think it is very important that the c.c.o.'s who are here of our -- c.e.o.'s who are here from our autocompanies realize what is happening with these autodealerships, and i for one want to know how this process is working. i want to know from g.m. how it's going to work, and i want to see if there's any mitigation for these communities and these families that will come forward. and it's not our place to change your decision. it is not. but it certainly is our place, especially where there is so much taxpayer money involved, for us to make sure that everyone is treated as well as can be in this circumstance. and we've heard from the people who make the cars, the workers,
and we've heard about the bond holders, the stock holders, and now today we're going to hear about the dealers, because i think they had nothing to do with the design of cars, nothing to do with the cost of the company, yet 40,000 people from chrysler are losing their jobs and then general motors is yet to come, and i think it is congress' responsibility to look at the whole picture of this economic impact. thank you, mr. chairman. >> i thank the -- >> thank you, very much mr. chairman for holding this hearing. i look forward to hearing from the witnesses. i want to make sure my dealerships who are here, chrysler and g.m. dealers,
pontiac and in redwood falls, which is a chrysler dealer, nelson autodealer which is a g.m. dealer and fewery dodge chrysler in lake almay. what's so puzzling for so many of our dealers in minnesota is that some of has to dealers were actually doing pretty well. walter of pontiac for four of the last five years has been number two in sales for all dealers in minnesota. one set a record with 103 new cars sold beat the record in may with 113 car sales. can a ronse motors service working increased by 75% yet these three dealers received termination notices so understandably they have questions they want answers about how these decisions were made and why they were given so little time and if there's any
time that can be extended they feel these decisions were made in the board rooms in detroit but are affecting those in the living rooms of minnesota. senator rockefeller described this throughout the country it's about homegrown locally owned businesses as well as the customers and compleeze who depend on them. the co-owners or fewery dodge chrysler the business been in lake almay for decades with 40 workers the largest employer because of what was going on they had a rally with 400 people show up. i 1200 letters from people in this community who want this dealer to stay open. the things we are most concerned about is first of all, why there isn't some kind of internal appeals process on the chrysler side for those who think they have been wronglyal
targeted when mistakes have been made and acknowledged by the auto industry in the past would lead one to believe that there could be mistakes made in decisions about which autodealerships should be terminated. we're concerned about the timing. some of these dealerships have been in business for decades and then given 26 days, 26 days on the g.m. side they were given longer time but then some of them have been given these letters which only give them until july 12 to make a decision. not enough time to make decisions or make sure they've sold their parts or not enough time to get their employees some kind of landing 2k3wr0u7bd. and these are employees just like there are employees in the detroit, they are the heart and soul of so many communities in the state so we would like to see some fairness injected into this process. obviously it is your decision to make but when we're talking
about taxpayer dollars we're talking about this difficult time. and families in these difficult times. thank you, very much. >> as we always do, we understand. and next will be senator yo hans. >> i really appreciate you conducting this hearing. and it's good to see you back. here's the problem. as i see it, i think everybody has spoken very eloquently about the difficulties that this has caused back home. and we're all getting the phone calls and letters. i've got bullet points from one of your dealers at chrysler talking about the jobs that are going to be lost, explaining to
me how they don't feel they are costing chrysler anything. how fair they feel it was, how unfair they feel it was to have so little time after being a part of the organization for so long. but here's the problem, the deal is done. i never would have believed as a candidate for the united states senate that the united states government could buy general motors without a hearing, with no vote, yes or no. that a dealership plan could be rolled out that literally put people out of work. this was supposed to save jobs, i thought, put people out of work with no oversight. i never would have imagined in a million years that that could be accomplished. and i find that to be extremely
bothersome. there are billions and billions of dollars at stake here. the other thing that i will share with you, i think if i would have called any one of my constituents back in nebraska on friday and said to them, you know i've been thinking about it, i think that,000 dollars that you've worked hard to save in your savings account should be invested in general motors. you know what i think the response would have been? they would have laughed at me and hung up. they would have laughed at me and hung up yet on monday, our government bought general motors. and by every definition i can see, that is probably the poorest investment you could possibly make. and then this on top of all of that with dealerships closing, people losing their jobs.
i don't see how that makes any sense. so i want to hear today about your role with the administration. i want to know who had the plan. i'm not saying who had it for approval. but who did you submit it to before you rolled it out that is associated in any way with the administration? i also want to just mention, as i wrap up my comments today, i'm going to speak on the senate floor about this tomorrow, but i have an amendment that basically says if you're going to use tarp money and you're going to end up with ownership of a stock you have to get congressional approval. see i think it's time to bring transparency to this and shine
a bright light on what's going on here because it's not fair to these dealers. they see chrysler and general motors going into bankruptcy and they can't even tans question if they are going to be one of the ones getting a letter. so that is not fair to them, that just simply is not fair, so i appreciate the chairman's courage in taking this issue on. i think it's enormously important, not only to folks back home, but how we prarte as a nation and the impact on our economy when we nationalize something like the auto industry. thank you, mr. chairman. >> thank you, sir. thank you, very much senator. >> thank you mr. chairman. and i appreciate the hearing also welcome back, thank you for one of the meetings i was allowed to take that to the gavel. don't worry, we're not going to get used to it, but i appreciate the opportunity.
to the folks that are here, thank you for attendanting. i'm not going to go through a long list of speech here on the whole issue, but i do have questions i want to ask. i want to ask them in my presentation so you can start thinking about them. because i think all of us will have issues and concerns. i think alaska has actually been on the best end of it as you can call a best end in chrysler we had none that were requested to close and g.m. but the issue to me is where do we go from here? how do we ensure the long-term growth of the companies if they are there at all? how do you exand if dealerships in because the asufpks is how do you they are supposed to be grown and how do you grow that? when they are still an authorized dealer and still
have inventory, how can you allow them to extend their times so they can sell off that inventory so they can recoop that cost? as in a layoff situation do you give a package to the employee in what are you doing for the dealerships to ensure they have capacity to deal with the transition they may have to make? how do you ensure that the individuals that have warranties in small towns have a place to go. to get their work done? are there ideas that the companies are considering to be even hybrid of some of these dealerships to make sure they are warranty dealerships so people don't have to go in my case hundreds of miles to get a vehicle taken care of. i can complain a lot about what happened, where we are, who caused it? the people who are paying the price now are a lot of dealers
siting this in room and employees. i know in my community, dealers are a backbone of a lot of our non-profit work, they are the ones you see out there making the community happen. they are the people as a former mayor they would be the first at the on deck to help us make a difference in our community so i'm interested in what you're doing to help this transition and how you're going to grow your business to ensure dealers exist in the future and what are you going to do to help in transition knowing you would do for similar employees what are you doing in this layoff? that's questions i'm going to have so it gives you food forethought as we move to the question period. thank you. >> thank you senator begigh. senator lautenberg? >> thank you, mr. chairman. and to those of you at the
witness table who have leadership positions in the -- in your respective striss, must have a terrible conscience right now. when you think about what's being done to dealers. small businesses. typically family businesses. businesses that have endured for years. in mercer county, new jersey, for instance, bill coleman was informed less than three weeks ago by chrysler that his dealership will be closed. his father started the family business 22 years ago. and people are losing their jobs left wondering if -- in new jersey 30 dealerships this all will face the same fate. and i want to be clear, because there is, has been
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