Wednesday, July 22, 2009

Obama Auto Adviser Tells Lawmakers Not to Undo Dealer Closings

By NICK BUNKLEY | Published: July 21, 2009
The leader of President Obama’s automotive task force warned members of Congress on Tuesday that reversing or stopping the closing of thousands of General Motors and Chrysler dealerships could threaten the automakers’ turnarounds and keep them from repaying billions in government loans.

. . . Reopening dealerships would raise “enormous legal concerns, to say nothing of the substantial financial burden it would place on the companies,” Mr. Bloom told the House Judiciary Committee.

But committee members expressed outrage that profitable and longstanding dealerships in their districts had been eliminated. Mr. Bloom insisted that the government, despite having a stake in the new Chrysler and G.M., had played no role in choosing which dealerships should stay open. He rejected claims that minority dealers had been affected disproportionately or that a dealer’s political leanings had been considered.

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