Boehner joins LaTourette: WH should suspend dealer closures
Monday, October 25, 2010
U.S. Reps. Steven C. LaTourette (R-OH) and John A. Boehner
(R-OH), Republican Leader of the U.S. House of Representatives,
have called on the Obama Administration to immediately suspend GM
closures until a current investigation of dealer terminations is
completed.
LaTourette will host a press conference early this afternoon,
and will be joined by local auto dealers and dealership advocates,
including Alan Spitzer, founder of the Committee to Restore
Dealer Rights. The event will be at 1 p.m. at Sims Chevrolet,
5180 Mayfield Rd., Lyndhurst.
Three Ohio dealers are seeking to vacate their arbitration
rulings, and return to arbitration armed with new evidence from a
federal SIGTARP report on dealer terminations. Mark Sims is
one of two NE Ohio Chevrolet dealers who could soon be stripped of
his dealership, and the other dealer is in Boehner's district. GM,
which received nearly $60 billion from taxpayers, opposes the
efforts, and has sued Sims and the other Ohio dealers in U.S.
Bankruptcy Court in New York.
LaTourette and Boehner on Friday sent letters to President
Barack Obama, Treasury Secretary Timothy Geithner and Neil
Barofsky, Special Inspector General of the Troubled Asset Relief
Program (SIGTARP). The lawmakers asked that GM dealers slated
to close at the end of the month remain open while investigators
look at the dealer termination process.
"There is too much at stake to proceed in an atmosphere where
dealers were denied so much crucial information in a process rife
with secrecy," the lawmakers said. "As the findings of this
investigation may shed much needed light on the proceedings
affecting hundreds of dealerships nationwide, we believe it is
necessary to thoroughly analyze its results before continuing with
the closures of hundreds of dealerships, and the potential loss of
thousands of jobs."
LaTourette and Boehner are greatly concerned that a SIGTARP
report on dealer terminations was released just days after
arbitration ended in July, effectively denying dealers of vital
information that could have assisted in arbitration cases, or
efforts to reach fair and fully informed settlements with
automakers. The law that created an arbitration process,
spearheaded by a LaTourette amendment, says dealers "may present
any relevant information during the arbitration."
The Ohio lawmakers said the SIGTARP report found that GM didn't
document meetings where dealer termination decisions were made, and
GM was inconsistent in following its stated criteria for
closures. The head of the Administration's Auto Task Force
told SIGTARP officials that dealerships could have been spared from
closure, but doing so would have been "inconsistent with the
President's mandate for shared sacrifice." One GM official also
told SIGTARP officials that the automaker usually wouldn't save
"one damn cent" by closing any particular dealer.
At the press conference, LaTourette will provide detailed
information from the SIGTARP report and a more recent Congressional
Oversight Panel report that found many of TARP's most crucial
functions were effectively outsourced to private contractors, whose
work is shielded from public view. One consulting group was awarded
a $7 million contract to help Treasury come up with a restructuring
plan for GM that included more than 1,000 dealer closings. The
contract was for six months, but Treasury wanted the work done in
three months.
Dealers in attendance, including Mark Sims, will share personal
stories about their struggle to save their family businesses and
keep their workforces intact. For example, one NE Ohio
Chevrolet dealer was terminated by GM just shy of its
100th year in business, and is believed to have been the
longest continually running Chevy dealer in GM history.
LaTourette will also discuss documents from SIGTARP obtained
through a Freedom of Information Act (FOIA) request. The
documents, among other things, disclose "an open investigation for
law enforcement purposes" and reveal that the head of the Auto Task
Force wanted to shield industry experts and analysts they consulted
about dealer terminations, urging the Inspector General to have
off-the-record interviews and not name them in a SIGTARP
report.