Letter stresses community and economic impact of dealership closings

WASHINGTON, DC – Today, Wisconsin Senators Herb Kohl and Russ Feingold, sent the following letter to Steven Rattner in response to the closure of Chrysler and GM dealerships nationwide. They urge Rattner to protect car dealers and consider the economic and community impacts of these closings. 

May 22, 2009  

Dear Mr. Rattner:

We are writing to express our deep concern regarding the planned closure of 789 Chrysler and roughly 1,100 GM dealerships across the country.  While we understand the hurdles faced by the auto companies in attempting to restructure and remain viable, we believe that these excessive closures will have a ripple effect across the economy and will add pain to already hurting communities. 

The announced closures and their impact on local economies could not come at a worse time.  In March, Wisconsin saw the highest unemployment rate in 27 years – 9.4%.  These figures reflect the economic crisis nationally and show the impact it has had in Wisconsin.  The planned closure of 15-16 Chrysler dealerships and an undisclosed number of GM dealerships presents yet another blow to our hardworking constituents and will potentially add hundreds to those currently seeking employment. 

Beyond the direct impact of jobs loss, we are concerned about the ripple effect that dealership closures will have on local communities.  Dealers often have deep ties to their communities; they are the sponsors of community events, local teams and leagues.  In rural areas, closures will force residents to travel significantly further for services covered by warranties.  Beyond an inconvenience, this could pose a significant financial burden on families who will either be forced to take the time to drive further away or will have to pay for services that would have otherwise been covered.  In urban areas, we are concerned that the closures will impact prices while reducing the options available to low-income and minority populations. 

We are also concerned about the time frame that dealers losing their franchise agreement face.  Three weeks represents an unrealistic and overly burdensome time frame, one that serves as punishment for countless dealers that have loyally served Chrysler – some for several generations.  That is why we cosponsored an amendment offered by Senator Kay Bailey Hutchison to the Supplemental Appropriations Act of 2009, to require companies receiving taxpayer dollars to give dealers sixty days before closing.  We believe this amount of time, while still brief, will give dealers a better chance at avoiding bankruptcy.  

This won’t just protect the individual dealers.  Our concern is for countless workers employed by the dealers, and for the local communities they live in and have served.  The reconstruction of GM and Chrysler is not an easy task and difficult decisions will need to be made.  We ask that as you work with the companies and make those decisions you take into account not just the bottom line, but the communities impacted along the way.   

Sincerely,

                                          # # #