McCaskill Demands Answers on Dealership Closures

McCaskill
Demands Answers on Dealership Closures

Senator
questions Chrysler, GM execs on bankruptcy settlement, including rumored bonuses
and insurance at hearing today

WASHINGTON, D.C.As endless questions remain in the wake
of dealership closures by Chrysler
and General Motors (GM), today U.S. Senator Claire McCaskill urged Chrysler and
GM executives to be more accountable to local dealers and consumers in a hearing
held by the Senate Committee on Commerce, Science and Transportation. Recently,
dealerships across the country, including a number in Missouri, that sell
Chrysler and GM vehicles learned their contracts will soon be terminated as part
of bankruptcy settlements.

At the hearing, McCaskill also urged Chrysler President
Jim Press to look into an allegation that $20 million in bonuses have been
allocated in the bankruptcy budget for current Chrysler employees to stay behind
to oversee the liquidation of the assets not assumed by the “new Chrysler”
company that emerges from bankruptcy.   

“There’s a pool in this budget of up to $20 million in
bonuses. I can’t imagine what kind of kick in the gut that would be… if there’s
$20 million in bonuses for as few as three to five people that are associated
with the old Chrysler. I think the pitchforks would come out,” McCaskill said.

Recently, along with her colleague Senator Kit Bond,
McCaskill sent a
letter
to the President’s Auto Task Force asking for assistance in answering
constituents’ questions on the criteria used to determine how many and which
dealerships would be terminated, as well as the process for dealerships to
appeal decisions.  Today, she remarked that just from the testimony presented to
the committee alone, it was clear that both General Motors and Chrysler had a
significant lack of communication with their dealers.  She commented further
that they had a great deal of work to do to make sure their dealers are provided
with up to date and accurate information about their dealership status and their
responsibilities through the bankruptcy process.

She also highlighted that in the event of an accident,
consumers will have no means of compensation for injuries from accidents caused
by faulty vehicles or parts due to an unprecedented decision in the Chrysler
bankruptcy.  Under the current structure, the “new Chrysler”, which has been
formed through the bankruptcy via the sale to Fiat, will not be liable for any
injuries caused by a Chrysler vehicle sold prior to the completion of the
bankruptcy proceedings.  McCaskill pointed out that not only will this be the
case for Chrysler but now General Motors is seeking the same type of relief in
their recent bankruptcy filings.

While McCaskill recognized the difficulty that
dealerships are facing, she also stressed the fact that these companies are now
facing bankruptcy because they have grown too big and the government should not
dictate how they restructure.

“I think we all have to acknowledge that these companies
are broke and they’re not going to succeed unless they get smaller. We’ve got to
figure out a way forward that’s fair to the dealers, but at the same time I
don’t think we can micromanage and insist they stay bigger because that’s why
they went broke,” she said.

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