press, mr. mceleney searched this. none of chryslers submissions to announcement could have been interpreted to put chrysler dealers on notice of the scope of the termination as follows your is that statement true? true? yes or no? >> i'm sorry? >> mr. mceleney state as follows, none of chryslers submissions to the government prior to may 14 announcement could have been interpreted to put chrysler dealers on notice of the scope of the terminations that followed. guesser no, is that true? >> we have had a genesys program, dealer consolidation program in place for more than 10 years, and i think the majority of those dealers had good, long time to prepare for that. >> would you submit for the record your comments that proves that this is not the case. now, mr. mceleney, did general motors give adequate warning prior to its may 15 announcement that it would be winding down approximately 1200 dealers, yes or no? >> yes. >> interpress, please describe briefly what chrysler is doing to reclaim and redistribute the inventory

press, but mr. henderson, mr. mceleney has indicated the franchisees do not cost manufacturers money to maintain. do agree with this question and agree with his position or do not? >> i do not. >> i do not. >> why? >> and our situation, one of the main reason is that caused our bankruptcy and a week product engineering is a requirement that we provide individual models for each standalone franchise, the sister models that cost substantial amount of money and took resources which in negative sales that is a huge cost. the sec and of course, is lost sales, lost volume in a market underperforming, those sales don't provide revenue for us. they lose that and it was 1.5 billion dollars, the development of individual models is 1.4 billion. that is a very real situation. third, because we have so many dealers and the average dealer of loses money, we don't have a competitive dealer network that can compete with other manufacturers with customer satisfaction, location, of facilities, advertising, a substantial cost to the

. >> now mr. mceleney, i want to give you the last opportunity to talk about the impact on every one of the dealers that you represent as the chairman of n.a.d.a. who haven't had a seat at a table or an opportunity to tell their story because i am guessing that you been getting a lot of phone calls. what has it been like for you and what type of concerns are you hearing? >> well, we are hearing many concerns expressed earlier today by some of the dealers on the panel. they run the gamut of the dealers sometimes third, fourth generation. my family as you know has been in business 95 years and going forward but there's a lot of dealers like me that are not. most dealers the net worth of their enterprise is represented in the value of the real-estate of the fact of when it and the value of their franchise and in the case of dealers being terminated by gm or chrysler the franchise value is a zero and immediately realize the value is single purpose real-estate particularly in this commercial real estat

>> thank you very much, mr. chairman. mr. mceleney, can i ask you a question first just so i understand? of the gm and chrysler dealerships, what percentage does your association represent? >> 50 -- >> 92% -- excuse me. senator, we represent about 92% of the dealers of all brands, both domestic and international. >> to -- thank you very much for that. i just want to make sure i was clear on the stats. to the two gentlemen from chrysler and general motors, did you ever have any inclination as you developed, i will turn to both in regards to the documents that are required by dealers to sign, did you ever have any inclination to work with the association to figure out what's a decent agreement that the dealerships could sign? >> let me see if i can't deal with both of the agreements. in the case of the wind-down agreement, as i said, we had done a similar exercise in canada just recently and our early returns from our dealers who are going to be wound down and with the appeal process, we think we have a workable approach for th

mceleney, is it mceleney? >> yes, that's correct. >> could you give me what percentage of your dealers in your association are multipoints across manufacturers? >> i'm not sure i can answer that. i can tell you, for example, 45% of the toyota dealers also have general motors franchises for one example. the average dealer has roughly two dealerships on average. >> in my former life, my first husband and his family had car dealerships. so i know a little bit about that. we had pontiac, bmw and chevrolet. and i know a little bit about the car business and under capitalization and the problems and struggles and i know the ongoing fights between the mothership and the dealers. there have been lots and lots of battles over the years. i understand the passion and the pain here. i think we vall to acknowledge that these companies are broke and they're not going to succeed unless they get smaller. we got to figure out a way forward that is fair. let me ask this for -- this is a difficult question, mr. press. i looked i

mceleney, is it mceleney? >> yes, that's correct. >> could you give me what percentage of your dealers in your association are multipoints across manufacturers? >> i'm not sure i can answer that. i can tell you, for example, 45% of the toyota dealers also have general motors franchises for one example. the average dealer has roughly two dealerships on average. >> in my former life, my first husband and his family had car dealerships. so i know a little bit about that. we had pontiac, bmw and chevrolet. and i know a little bit about 'br and -- it talked about the budget for the old company. what troubles me in there, there is an acknowledgement there may be up to 15 employees of old chrysler working on this bankruptcy and there is a pool in this budget of up to $20 million for bonuses. i can't imagine what kind of kick in the gut that would be if we were to learn in the next two weeks that some of the old chrysler folks which are getting paid their salaries, which they should, you are doing hard work, but if th

john mceleney, chairman of the national automobile dealers association. >> thank you, mr. chairman. mr. chairman, senator hutchison, i am chairman of nada and the national automobile dealers association. i am also an automobile dealer. my dealership is mcelenen center in clinton, ohio. we have actually been in business 95 years. we provide jobs for 140 people. my family also held a chrysler franchise between 1984 and 2007. mr. chairman, we commend you and we thank you and senator hutchison for convening this hearing. in three face-to-face meetings with the president's auto task force, and at numerous meetings with the manufacturers, no one has explained why dealer reductions will make chrysler and gm more viable. over 90% of chrysler and gm's revenue comes from the dealer, because the dealer buys the cars, the parts, and even the dealership signs from the manufacturer. the retail network, the land, the building, the employees, the dealers pay for all of it. dealer cuts won't save any money, because dealers don't cost the manufacturers any money. when a dealership closes, the manufac

. >> thank you, mr. henderson. john mceleney of national auto dealers association. >> [inaudible] [inaudible] [inaudible] the jim of dealers throughout this ordeal. in the initial viability submissions chrysler mention nothing other than continuing our current program to facilitate dealer consolidation. yet bankruptcy has less on hundred 89 chrysler dealerships without franchisees on 26 days' notice without even buying back their vehicles, cars and factories specific tools. it no manufacturer has ever done this. gm original liability submissions reflected desire to eliminate some brands in his call for additional dealer consolidation over an extended time. now besides the brand eliminations, 1350 additional gm dealers face terminations on a much more aggressive time line. why this dramatic shift? in response to a question before the senate banking committee on june 10th, ron bloom of the auto task force said and i quote, we did not give the companies in the miracle targets but we certainly did say regarding plants