Press Releases

Luetkemeyer Joins Call Asking President to Reverse Decision Closing Car Dealerships

Washington, DC, May 18, 2009
U.S. Rep. Blaine Luetkemeyer (MO-9) signed a bi-partisan letter calling on the President to reverse his decision to force the closure of Chrysler and General Motors dealerships across the nation including at least 4 Chrysler dealerships and an undetermined amount of General Motors dealers in the 9th Congressional District because of the impact it will have on jobs and local communities.
U.S. Rep. Blaine Luetkemeyer (MO-9) signed a bi-partisan letter calling on the President to reverse his decision to force the closure of Chrysler and General Motors dealerships across the nation including at least 4 Chrysler dealerships and an undetermined amount of General Motors dealers in the 9th Congressional District because of the impact it will have on jobs and local communities.
“It should not be the role of the government to force these small business owners out of business,” said Luetkemeyer, who also serves on the House Small Business Committee. “This decision will not fix the problems of the auto manufacturing industry, yet it will cost our communities good jobs. This is absolutely the wrong way to get our economy back on track.”
The 9th District Chrysler dealerships set to close under the President’s direction are: Century Dodge Chrysler Jeep, Wentzville; Chris Auffenberg Jeep, Washington, Mo.; Dodge City Motors, Columbia; and Zeiser Chrysler Dodge Jeep, Truesdale.  A General Motors spokeswoman said the company will not release to the public a list of dealers to close.
“We appreciate the enormity of the mission your Task Force has undertaken to help the auto industry.  However, we are concerned the reduction of dealerships, at a time when the national unemployment rate is rising, is unconscionable for the government,” says the letter from Luetkemeyer and other House members to the Treasury Department. “We respectfully request that the Auto Task Force provide more transparency and justification on forced dealership closures, so you can revisit this decision and consider the damaging effects on local communities.
NOTE: A copy of the letter to Steven Ratter, head of the Presidential Task Force on the Auto Industry, follows:
The Honorable Steven Rattner
Counselor to the Secretary of the Treasury
United States Department of the Treasury
1500 Pennsylvania Avenue, NW
Washington, D.C. 20220
 
 Dear Mr. Rattner:
We are writing to express our serious concerns regarding the demands by the Presidential Task Force on the Auto Industry for the rapid and potentially disorderly elimination of thousands of Chrysler and General Motors dealerships.  This action, if implemented, could put approximately 150,000 people out of work.  Since these dealer reductions and its ripple effects would have a serious and adverse impact on the United States, we would like to ask that you revisit the forced closure of thousands of dealerships.
To justify these job losses, the Task Force is apparently relying on a misperception that new car dealers create a cost burden to auto manufacturers.  This is not true, as on average, about 90 percent of an automaker’s revenue comes from dealers purchasing the automakers’ vehicles.  Far from saving money, a rapid reduction in dealerships would further reduce GM’s and Chrysler’s revenue and market share.
Automobile dealers are one of the largest private sector employers in the United States, providing tens of thousands of local jobs and contributing millions of dollars in tax revenues to states. Auto dealers are anchors in communities throughout the country and many times ownership is passed down from generation to generation. In addition many auto dealerships are minority owned and have traditionally provided strong local community support. Each dealership creates an average of 52 neighborhood jobs and these positions typically pay twice the national average as other retail-sector jobs.  Dealers have invested about $233 billion to create an auto sales network that provides a vast distribution and service channel for consumers.  In fact, automakers created the franchise dealer network specifically to lower their costs, as they outsource virtually 100 percent of the cost associated with selling and servicing cars.
Last year, over a thousand auto dealers closed their doors for good.  Further thinning of the dealer ranks through normal market, dealer-driven consolidation, and other forces is inevitable.  The action being proposed has not taken into effect the impact on communities and workers, and without any evidence that massive and immediate dealer reductions are necessary to restore the financial health of GM and Chrysler.
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