Skip to main content

tv   [untitled]  CSPAN  June 12, 2009 11:00pm-11:30pm EDT

11:00 pm
>> management. >> and that was on your best judgment as to what was an interest of the diggers? >> the treasury was involved as a purchaser but they were not involved in individual decisions on what the exact number should be. >> so you will knowledge that that decision was a decision you make, not the white house. >> yes sir. >> it was not made by the white house. it was made by our company, chrysler. >> so the basic question is not just a matter of fairness, although i agree with my colleagues on that. it is a matter of business judgment. somebody is right and somebody is wrong. you gentleman on behalf of your companies have come to the conclusion of closing down dealers, including dealers in good standing who have done a good job for a long time, in some cases, generations. .
11:01 pm
generations it is in the interest of the company to close them down; is that right? >> in our case is this the only way we will survive, and forward. >> there's obviously evidence that has presented the pos dealers arnall costing money but actually can be a lifeline to reenergize sales in their local communities, so you are going to bear the responsibility if in bear the responsibility if in fact it turns out that you wrong and they are right; correct? >> yes. we will bear the responsibility. >> and on this appeal question -- here's the dilemma we have. the bankruptcy code is brutal. this man over here, his grandfather was in the business. his father was in the business. and had there not been the resort to bankruptcy, which was obviously made as the result of the business situations that developed over decades, had there not been the resort to
11:02 pm
bankruptcy, you would have had to have a sit-down, face-to-face interaction with people that had been loyal, effective and solid business partners for decades; correct? >> the bankruptcy was caused by a market that ended and no credit. >> once you go in the bankruptcy called the rules and that he is to apply, contracts, agreements, relationships, are thrown out the window. the law allows that to happen but it's the nuclear option; correct? >> it wasn't the desire or the plan. it was a failed enterprise that stopped operating, and it doesn't exist any longer. >> and what it did is allow the court to throw out the contract law and state statutes that provided some equity between the dealers and the company and here's the question.
11:03 pm
you're not responsible for what bankruptcy law is, this is the question you and mr. henderson. given the fact bankruptcy is a brutal tool and in some cases it may be necessary, do you believe that entity in general motors and chrysler which resort to bankruptcy for the best of intentions i will stipulate that for the moment, should bend over backwards on the side of giving the benefit of the doubt to dealers that have been loyal, effective and largely profitable partners to the manufacturers know what? >> i can't speak with the bankruptcy court should or shouldn't do -- >> i'm not asking what they should do, i'm asking what the company should or shouldn't do. >> the reason we approached winding down agreements is to handle this responsibly as we could. >> the bottom line is the law
11:04 pm
probably allows you to do what you're doing and i have no doubt that you've probably made the decision you think is consistent with exercise of your responsibilities. you have got tough jobs. but we have got a unique situation here where the brutal on fairness of the law is imposing enormous and frankly unspeakable hardship on some pretty good people, and you will acknowledge i am sure your fallible and you made your best judgment that doesn't guarantee that your right and the request that i have loved you is whether in the exercise of your judgment you will give the benefit of three free doubt that can be given to people who've been doing a good job for a long time. >> this was not using oh-la-la. with great respect understand how that could be construed but the fact of the matter is a new company was formed in our particular case and a certain number of dealers with certain locations and certain brand
11:05 pm
representation selected to go forward. but the cause of this is we became a field enterprise. >> i yield back. >> thank you. we are going to go another round. mr. henderson, let me ask you this. on the part of the interest of the new general motors, right? in canada is part interest? >> yes, sir. >> are we closing and dealerships in canada? >> we went through a similar process. >> did you hold hearings in canada? >> we did not. >> mr. press, we got the new chrysler and old chrysler, will the new chrysler dealers required to sell fiats? >> with a required to sell fiats? we haven't established a brand position and product plan afford from now or alliance we will be branding fiats or some other
11:06 pm
brand. >> was it one of fiats considerations for helping out here with the new chrysler to get their product line in the united states? >> part of the new company is definitely going to benefit for the $10 billion worth of resources and product of a limit and hardware from fiats that gives tremendous car in trees and technology that would bring in our product line. >> are you required to sell fiats is line asking. >> we are going to have cars that have fiats technology or engines. >> but a car that says fiat? >> we haven't yet determined what brands and names will be on the vehicle. a vehicle could have a fiat name and it may have a chrysler name. >> mr. barton said, just for laughs, he said i help chrysler and general motors review some of these dealerships and maybe some of these things can be reversed. in all honesty because you went through bankruptcy there's no
11:07 pm
way for these chrysler dealerships being closed to get their cars dealerships back is their? >> that is correct and my answer is we would be transparent and share the information -- >> but we have got to be honest. none of these gentlemen are going to get their dealerships -- >> that is correct. >> and there was no process to get the dealerships back. >> that's correct. >> that's the bankruptcy, those contracts were broke therefore you don't have to offer them anything else; correct? the dealerships, the contractors were broken, they were done, bankruptcy discharged them. >> but we took responsibility for the redistribution of the inventory is. >> said that is all bothers me. that is old chrysler. those are old chrysler parts. how can the new chrysler if it isn't a link to give these gentlemen appeal process how can the new chrysler take stuff that was old chrysler? it seems like you are being selective in what you were going
11:08 pm
to take. >> that is a great question. the redistribution is tohe dealers, not our company. so what we did is provided for distribution of the vehicles that were old chrysler dealers inventory and they are being moved into new chrysler dealers inventory. >> the $350 is going to get my 09 moved off the lot who gets that money? >> that goes for the inspection, cleaning of the vehicle and transportation logistics. that's an outside third party company. >> okay, so the new chrysler doesn't receive that money or distribute that money? >> no, sir. >> okay. the wellhead, mr. keikenapp. you can't ask a question but if you have got a statement, the head. >> no. >> you can ask questions, sorry. mr. henderson, let me ask this. did you have a conference call on june 10 with gm executive
11:09 pm
retirees? >> yes. >> two days ago. >> yes. >> was a statement made along these lines, i don't have it exactly, that no executive level gm retiree will receive retirement benefit package more than $100,000 at the direction of the treasury department or the auto task force? >> the discussion had to do with pensions that applied to executives nonqualified plans as part of the total number of liabilities one of which was that there were six liabilities that were on funded and unsecured, and part of our bankruptcy filing the purchased sale agreement suggested we would have to reduce the total amount of the liabilities by two-thirds. the management had the responsibility to allocate the two-thirds reduction so as part of doing that we identified a plan with respect to the salary, excuse me, executive retirees
11:10 pm
come any executive retiree whose combined qualified and benefit was less than $100,000 they would be unaffected and to the extent their benefits in total were more than $100,000, the extent of the unqualified plan would be reduced by two-thirds. .. >> have to be returned to
11:11 pm
general motors in the trait? >> yes, sir. >> of those dealers going forward or lost, a close, what happens if they don't sign it? >> first of all, 96% as of this morning had either signed it or verbally said it is coming in. we anticipate a high percentage of those dealers will signed those. in the event that they don't the contracts will not be assumed by the new company and they would be rejected. >> they would be out of business anyway. >> any financial incentives in the wind down the agreement would be lost? >> correct.
11:12 pm
>> . >> as long as they do not sign that under duress. [laughter] but there are 1,000 more dealers going to be closed so if i don't get my contract in right away or protest too loudly i could be one of the other thousand dealers? >> in terms of participation agreement 99% are in and we expect to have all of them. mr. spencer? >> a couple of comments mr. press i would submit the cost producer will go up after the dealers are terminated because first of all, may be 40% or so get no representation at all part of it is electronically. there is no personnel. i will also submit they will cut very few field of people
11:13 pm
with you were dealers those fixed cost will go up. the other comment is the sales responsibility just too quickly educate the committee, they take the state average penetration for their brand and they expect every dealer to hit state average penetration in black of the problem is just to take an exaggerated, and not exaggerated by an example of how that can be skewed to an unfair management it has been found in ohio and through expert testimony they have thrown out many cases as a criteria, one of the terminated rejected stores in the congresswoman district, there is a dodge dealership in the middle of
11:14 pm
four country. two ford plants one was shattered but still a lot of residual buyers and living there, retirees and a planned still going. this dealership is right between that. 100 miles to the west is another dealership near a jeep plant in toledo ohio. the dealer in toledo mend my dealership is held to exact the same standard for govett is absurd >> mr. anderson does gmac own part of the new gm board is gm's still own part of gmac financing? >> tm will own the shares in a gmac. we will own approximately as part of our passivity
11:15 pm
agreement, we agreed we would sell at our interest at 9.9%. >> thank you, mr. chairman. i wanted to pick up on the gmac part here. i talked to a lot of folks in my district, and one of their complaints is the florida issue with gmac. i had a dealer tell me, after gmac got the government dollars to the floor, the immediately raised the interest rate by 6%. in a distiller play -- they made this dealer paid $10,000 just to be able to stay on its non- refundable. in the last seven months, they changed his contract 14 times, always with the threat of containment. the micromanaged and manipulated his floor stock. stock. they told him he had too many cars so he sent them to auction and then they said they had not had an inspection
11:16 pm
and the card numbers were inaccurate. he said i did what you ask and they said you should call us to tell us that he said it would be eliminated to have a congress man in the room. this is not unique and but what terms of that side of the issue. let me go to mr. thomas. you have now had a brief opportunity, is this the first time you have seen the criteria upon which the decision was made in your wind down agreement? >> i have seen it one other time the last few weeks. i have seen things in this paper regarding the wind down commitment and it appears i made the wrong decision it
11:17 pm
says in the case of a rejected dealer. >> what page are you want? >> page number five. is as out the very bottom for gm dealers those that have a plan with gmac unfortunately we are with wells fargo, but for gm dealers that have a plan with gmac of the dealer agreement is rejected we expect the dealer would turn in new vehicle inventory which gm would redistribute. the idea of playing out 17 months sounds good and a sense for the employees, but it is a hard sell to convince someone why they should buy a past model car from new when you are not even going to be there. that is tough. >> is the hard to sell a model
11:18 pm
car from a manufacturer who people were not convinced was going to be there. >> that as well. >> did that affect your sales? >> it has affected them. >> was that taken into account? >> i think something was taken into account but i don't see it as being sufficient. we took four cars to auction about one year ago, two cadillacs and two corvettes and we lost $65,000 on for automobiles and project that forward, it is not a pretty picture. >> do you feel disinformation provided to the committee would give you an adequate understanding how they evaluated the wind down agreement vs. the go for agreement? i guess i will let you answer. >> the whole document, i asked
11:19 pm
specifically for a definition of what would be my fate in the state of rejection? there were really two choices. if you were wind down you could sign of the wind down agreement a tough playing bridge or fall into rejection and node definition of what that meant. >> you did not know the option really? >> i asked for it. >> did you get it? >> i did not get something as thorough as this but rather short answer is. i had to ask on that e-mail questions ninth, i asked about mr. henderson's comment about redistributing inventory that i think were made in the senate hearings, the e-mail response comes back, you have to call the call center.
11:20 pm
i call the call center, they don't have information about that comment or its implications. >> mr. henderson, do want to answer his question? reckon the case, first thing the total compensation in the wind down agreement is intended to be superior to termination that is why it is a high percentage. if you voluntary terminate we had 50 dealers last month voluntarily terminate. >> you said 80 on average. >> we had 50 last month and knowing this agreement was there. what happens they floor plan that cars to gmac it has an obligation an agreement the dealer can turn the car's back and we will be distributed cars. that is how it works. >> if you are with the bank? >> we know how such an agreement it would have to be bank by banks to make the
11:21 pm
highest percentage hour floor plan with gmac it. >> what does that mean for you mr. thomas? >> i would have to talk to my bank. >> you have an agreement with bank of america or elsewhere go? >> i don't know. this would apply only in the case of the termination as opposed to the wind down and we would continue to work with the dealers through october 10. >> guy realize my time is over but to both gm dealers and wind down, what effect does it have on your ability going forward not to have the new product line going into the next year? you will still be with a lot? >> we will. we will not have the current offerings. >> how does that help the gm? i do not understand that part. what am i missing?
11:22 pm
how does them not be able to buy your new model vehicles help the 2010 vehicle? >> first of all, the one element of the wind down agreement is they could no longer purchase of new vehicles they could purchase parts. >> my question is why? help me understand that makes sense purdue make money by selling vehicles. right? they make money by selling the same vehicles. why would you want them buying your 2010 vehicles than it is there problem. right? they go out of business at the end of january. >> for the purpose of the wind down agreement to we offered incremental resources for the vehicles in inventory it was over a 17 month period to wind down their facility as opposed too repugnant -- replenishing
11:23 pm
their stock and have a problem at the end of the contract. >> when the model change occurs everything we have will be yesterday's news. it will be very hard to get from october 1, 2009 through october, a 2010. >> that is my point*. i said i felt if he were terminated by mid did your dealership deal terminated? in fact, it is much shorter term provides realize you are buying out but in the fact it is taking effect this fall? >> that is my sense. >> do you track it the same way mr. blankenbeckler? >> yes. in regard to the handout that was just given out, i could get no information to speak of
11:24 pm
the in regards to what your fate was should you not sign the wind down agreement from i was repeatedly, repeatedly, repeat edly called where is your agreement? where is your agreement? where is your agreement? 8d understand it? >> i can read. i and a stand what it says. that border the provisions of not signing? you will be rejected. what does that mean? let's talk about a provide to half a lot of paid vehicles icahn for every vehicle i have got and if i can pick up the phone and say gmac to get $4 million worth of inventory, at which 90 days or right now they are starting to produce 2010. and a business that appears to be going out if this a long
11:25 pm
leash until october i would like to make one other comment. one of the provisions of the. >> host: agreement i am paraphrasing, states in my case i will produce intentionally 84 years of sales records, my customers' names, a telephone numbers, my service customers and telephone numbers, and i am given 25% of my 8010 money -- wind down money. i get one person, one attorney come to me and say and do appear friday's the purpose of the electronic list of all of my customers are to be used to
11:26 pm
be given to a third party. that is how i read it for my replacement. what i have earned over 84 years, and both of these people are my personal friends i have to give names and telephone numbers you help me with the federal statute, i am not an attorney but i see this as a huge liability to turn over customer list. you would not go into a doctor's office and go get medical records. one customers would more than it in a gate. >> giambi one customer that brought an action? >> yes. >> i cannot see how that most not like we have been why do i have to supply my customers'
11:27 pm
names? everything i do is send electronically every sale that i make, i give you the name, address, you have got them. warranty records, labor operation it is given to them it is like again, all of the data-processing deals they are thrown back on us. we pay for those things. i would like to hear what mr. hendrick would say in response to my fear of a turning over my customer's identity. >> can he respond? does gm assume of the liability? >> he has a private policy we have excellent experience with being able to properly protect consumer information and our
11:28 pm
company's history. >> use in the agreement it is given to a third party so then how do have control? >> we have been able to manage overtime. >> who is the third party? >> we have to do the questions from here. sorry. mr. dingell? >> thank you, mr. chairman. >> what is your opinion of gm and chrysler prospective dealer closure plans with regard to substance and procedure? will you please submit your response for the record? >> both cases they were too deep in terms of numbers. >> would like specific criticism and submit it for the record because they have five minutes and also submit as part of that how can that
11:29 pm
be improved to result in fairness in your view to the dealers? in the case of both gm and chrysler it was not a transparent process. gm had an appeal but none in the case of chrysler which i think is problematic. with the liberation we have received today the chrysler dealers will be provided that criteria and makes sense there is an appeal process so those dealers that have been canceled can evaluate that in the case mgm the wind down as much more favorable to have the them to sell off parts and inventory and reasonably close the business in a rational format. in the case of chrysler the wind down was abrupt, 26 days because problems were dealers and >> what is it going to cost per car for

137 Views

info Stream Only

Uploaded by TV Archive on