Lawmakers want Obama to slow down on GM, Chrysler

[Justin Bimmer]

By KEN THOMAS, Associated Press Writer Ken Thomas, Associated Press Writer – Fri May 22, 6:51 pm ET

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WASHINGTON – Lawmakers appealed to the Obama administration on Friday to slow down the restructuring of General Motors and Chrysler, wary of shuttered car dealerships, job losses and the big unknown of a GM bankruptcy.

"We are asking President Obama to call 'time-out' on his automobile task force," said Rep. Steve LaTourette, R-Ohio.

Members of Congress urged the White House to re-examine its work to stabilize the U.S. auto industry, prompted by sweeping plans outlined last week by Chrysler LLC and General Motors Corp. to shutter hundreds of car dealerships.

They said a pending June 1 deadline for a GM bankruptcy created more uncertainty for the industry, and could lead to a rash of more job losses and dealership closings.

Thirty-six members of Congress, mostly Republican, told the White House they were troubled by the work of the auto industry task force appointed by the president earlier this year. The panel has worked with GM and Chrysler to try to restructure the companies.

"They represent various Wall Street interests who have long looked at exporting jobs out of this country," said Rep. Dennis Kucinich, D-Ohio, who accused the task force of facilitating plans by GM to import Chinese-made vehicles to the U.S.

Five House members, including Kucinich, LaTourette and House Judiciary Chairman John Conyers, D-Mich., met with a representative of the Obama task force on Friday. "They're anxious to have additional meetings," said LaTourette spokeswoman Deborah Setliff.

The White House said it was focused on helping the companies become viable to preserve jobs and strengthen the auto industry.

"Saving the auto industry is an urgent priority for our nation and our workers. The task force has worked diligently and deliberatively throughout this process and we will continue to work with all stakeholders," said White House spokeswoman Amy Brundage.

Chrysler LLC, which has received $5.8 billion in federal aid, disclosed in bankruptcy court last week its plans to close about a quarter of its 3,200 U.S. dealerships by June 9.

General Motors, which has received $19.4 billion in aid and could be forced into bankruptcy, has told about 1,100 of its dealers — about 20 percent — that their franchise agreements will not be renewed by late next year. GM said Friday it had borrowed an additional $4 billion from the government, bringing its total to $19.4 billion.

Chrysler plans to close eight manufacturing plants, part of its work to shed assets, debt and contracts and shift its good assets to Italian automaker Fiat Group SpA.

GM and the United Auto Workers union reached a tentative agreement Thursday on labor and health care concessions. Details have not yet emerged but GM had previously said it would close 16 factories, laying off 21,000 hourly workers.

While many auto plants are confined to Rust Belt states, the loss of car dealership jobs affect communities throughout the country. With an upcoming Memorial Day recess looming, members of Congress are expected to field questions about the job losses.

While GM has not made its list public, Chrysler has identified 789 dealerships in 49 states that are scheduled to be closed. Only Alaska was spared.

"These dealers deserve a little more than a pink slip in the mail," wrote Missouri Sens. Claire McCaskill, a Democrat, and Kit Bond, a Republican.

The job losses have also brought vows of congressional oversight. Sens. Jay Rockefeller, D-W.Va., and Kay Bailey Hutchison, R-Texas, the ranking members on the Senate Commerce Committee, said they would hold hearings on the dealerships in early June.

Rockefeller's home state could lose 17 of its 24 Chrysler dealerships while 50 Chrysler dealerships in Texas are expected to go out of business.

"These companies cannot be allowed to take taxpayer funds for a bailout and then leave local dealers and their customers to fend for themselves with no real notice and no real help," Rockefeller said.

[regfootball]

i knew at some point lots of folks would call foul on obama motors inc.

one story i read in business week magazine talked about how the obama task force has no one qualified with proper experience to be calling the shots they do.

investors instead of giving up the farm would be better off ponying up money to pay back the govt all the money it has borrowed gm etc. and letting them reorg under normal process. the govt way is going to ruin it more than the normal bankruptcy. bankruptcy but not get rid of the union?

the reason this mess happened was poor economy. the govt needs to fix the economy. not ruin the future for gm. thankfully, this task force nightmare at least delayed closings enough so it wasnt catastrophic.

[gm4life]

i knew at some point lots of folks would call foul on obama motors inc.

one story i read in business week magazine talked about how the obama task force has no one qualified with proper experience to be calling the shots they do.

investors instead of giving up the farm would be better off ponying up money to pay back the govt all the money it has borrowed gm etc. and letting them reorg under normal process. the govt way is going to ruin it more than the normal bankruptcy. bankruptcy but not get rid of the union?

the reason this mess happened was poor economy. the govt needs to fix the economy. not ruin the future for gm. thankfully, this task force nightmare at least delayed closings enough so it wasnt catastrophic.

I agree.

[David]

Interesting read, at this point you cannot save money loosing dealerships. On the front line of war, the fastest way to save a persons life is to just sometime cut off the bleeding dead appendage and seal it before you loose the whole thing.

I think the administration is taking the triage approach.

[Camino LS6]

No matter what "side" you are on, delay is deadly right now.

This needs to be resolved - yesterday.

[Chicagoland]

In the fall, Congress wanted GM/Mopar to "just go Bankrupt". And others were saying "let them fail, the Southern non union plants can pick up slack". Now, their dealer [lobby] buddies want favors as payback.

Edited May 27, 2009 by Chicagoland

[Camino LS6]

Even now, in the face of everything, same old congress.

[Intrepidation]

Apparently the Chrysler bankruptcy could be wrapped up as early as this week. I for one am happy to see it being done swiftly rather than having the company rot in bankruptcy court for months or even years.

Not much worse than waiting, I'd rather see a resolution.

[regfootball]

honestly, chrysler is lucky they got a deal brokered. i think congress and the amdinistration would have been happy to let chrysler be lost to attrition and let all attention be directed to keeping GM from being dismantled.

chry fans should be lucky fiat stepped up.

Edited May 27, 2009 by regfootball