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Minnesota auto dealers attend Senate hearing

WASHINGTON, D.C. — The Senate Commerce Committee convenes this afternoon to discuss the impact of GM and Chrysler dealership closures across the country. About 11 dealers from Minnesota will be in attendance. Sen. Amy Klobuchar is a member of the panel.

Fritz Henderson, CEO of General Motors Corporation, James Press, president of Chrysler LLC., and John McEleney, chairman of the National Automobile Dealers Association, are expected to be among those testifying.

Committee Chairman Sen. John D. Rockefeller IV will kick start the meeting, which had to be moved to a larger room to accommodate the crowd, with a prepared opening statement.

“Let me be very clear—I don’t believe that companies should be allowed to take taxpayer funds for a bailout and then leave local dealers and their customer to fend for themselves with no real notice and no real help,” Rockefeller said in a prepared statement. “That is just plain wrong.”

Top executives, however, are expected to defend their move to cut dealerships, calling it “gut wrenching” but “absolutely necessary.”

“There’s not enough business for the number of dealers Chrysler has today, given that we have less than two-thirds of our former sales volume,” said Press in prepared testimony. “The Chrysler dealer network faces the additional disadvantage of a legacy of dealers that sell only one or two of the company’s three brands — Chrysler, Jeep and Dodge — which have led to redundancies and inefficiencies in product development and marketing costs. Poor performing dealers within the dealer network also cost the company in terms of lost sales and low customer satisfaction.”

In prepared comments, Henderson said that GM had gone about the task of culling dealers in an objective and careful manner.

“Winding down under-performing dealers will eliminate the negative impact they have on our brand image and increase the opportunity for sales and service provided by our high-performance dealers,” Henderson said. “Consolidation will enable us to focus our resources on top performers and core brands…”

Minnesota dealers in attendance, however, have argued that in some cases the cuts have hit profitable dealers, who have consistently provided jobs in their towns and brought valuable tax revenue to the state.

More to come later.

In the meantime, for those so inclined, here is a link to a Webcast of the hearing.

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