Press Releases
Luetkemeyer Fights for Rural Auto Dealers During Small Business Committee Hearing
Washington, DC,
September 16, 2009
U.S. Rep. Blaine Luetkemeyer (MO-9) today went to bat for rural auto dealers at a hearing to evaluate decisions by General Motors and Chrysler to close nearly 40 percent of their independently owned dealers and the impact these closures will have on rural communities.
U.S. Rep. Blaine Luetkemeyer (MO-9) today went to bat for rural auto dealers at a hearing to evaluate decisions by General Motors and Chrysler to close nearly 40 percent of their independently owned dealers and the impact these closures will have on rural communities. “At a time when families are already anxious about losing their jobs, our government has decided to dictate to two private businesses that they need to close hundreds of dealerships,” Ranking Member Luetkemeyer said at a hearing of the Subcommittee on Rural Development, Entrepreneurship, and Trade titled “Role of Automobile Dealerships in Rural Economies.” “The heavy-handed, dictated closure of GM and Chrysler dealerships will translate to more job losses across our country, particularly in rural communities.” Don Thomas, owner of Thomas Motors, Inc. in Moberly, MO, testified about the forced closure of his GM dealership. Thomas has been a GM dealer since 1975, and the closure of Thomas Motors will result in the loss of 25 jobs for the small town of Moberly. Luetkemeyer noted that car dealerships are local businesses and provide significant sales tax revenues and employment opportunities to the communities in which they operate. They also pay billions annually in state and local taxes. GM and Chrysler submitted viability plans to the Obama Administration in mid-February 2009 to demonstrate how they would work their way out of their financial difficulties. At that time, the federal government had already provided GM with a $13.4 billion loan and Chrysler with $4 billion. The Obama Administration asked for viability plans on which it would base further federal assistance. The Obama Administration’s Auto Task Force, in rejecting the companies’ viability plans in March, cited a number of steps the automakers should accelerate, including reducing the number of dealers. As part of its restructuring plan, Chrysler terminated 789 of its 3,200 dealers in June 2009, and General Motors announced that it would reduce its dealerships from over 6,000 dealers to 3,600 when contracts expire in October 2010. According to the National Automobile Dealers Association, the GM and Chrysler dealerships slated for elimination have more than 100,000 employees. Don Thomas, owner and president of Thomas Motors in Moberly, MO, challenged GM’s decision to terminate his lease without a thorough review by saying, “We strongly feel the wind down of our dealership has certainly not been based on objective criteria. If we were afforded a legitimate review based on objective criteria, there would be no question our dealership would be granted a continuing franchise with General Motors.” ###
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