Not Out of the Woods Yet
GM, Chrysler Group face legislation to reverse dealership closings
Hey, remember when the federal government bailed out those automakers? For many, that whole fiasco is still fresh in their minds; for others -- especially those listening to the forward-looking platitudes at conventions like the Frankfurt Motor Show -- it may seem like the distant past. But lawmakers are telling GM and Chrysler it's high time they got around to working out the many details surrounding some of those deals.
Specifically, the companies need to address their planned dealership closings. In Chrysler's case, that means working out settlements for the 789 shops they've elected to close; for GM, that number is 1,350. Both companies need the cost-cutting measures, for obvious reasons -- and, as Lawrence Ulrich pointed out here earlier today, the sales future is even dimmer than originally thought.
Regardless of slumping sales, House Majority Leader Steny Hoyer, D-Md., and Sen. Charles Grassley, R-Iowa, are both using legislation to nudge GM and Chrysler to sit down with dealer groups and work out the settlements, which have stalled. Grassley has asked Senate Judiciary Committee Chairman Patrick Leahy, D-Vt., to conduct hearings on his legislation -- dormant for months after passing in the House but stalling in the Senate -- which could potentially reverse or halt those closings; Hoyer has publicly backed his move.
Obviously, we want these traditional mainstays of American automotive manufacturing to get past this very public debacle; to put out great products and generate sales and jobs. But, man, wasn't poor communication and ignoring responsibilities what got them into this mess in the first place? Bankruptcy isn't pretty, but it is their reality, and the sooner they take care of business, the better for everyone involved.
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