Luetkemeyer Fights for Rural Auto Dealers During Small Business Committee Hearing

Luetkemeyer Fights
for Rural Auto Dealers During Small Business Committee Hearing 

            WASHINGTON,  D.C. – U.S. Rep. Blaine
Luetkemeyer (MO-9) today went to bat for rural auto dealers at a hearing to
evaluate decisions by General Motors and Chrysler to close nearly 40 percent of
their independently owned dealers and the impact these closures will have on
rural communities. 

            “At a time when families are already anxious
about losing their jobs, our government has decided to dictate to two private
businesses that they need to close hundreds of dealerships,” Ranking Member
Luetkemeyer said at a hearing of the Subcommittee on Rural Development,
Entrepreneurship, and Trade titled “Role of Automobile Dealerships in Rural
Economies.” “The heavy-handed, dictated closure of GM and Chrysler dealerships
will translate to more job losses across our country, particularly in rural
communities.”

            Don Thomas, owner of Thomas Motors, Inc. in
Moberly, MO, testified about the forced closure of his GM dealership. Thomas has
been a GM dealer since 1975, and the closure of Thomas Motors will result in the
loss of 25 jobs for the small town of Moberly. Luetkemeyer noted that car
dealerships are local businesses and provide significant sales tax revenues and
employment opportunities to the communities in which they operate.  They also
pay billions annually in state and local taxes.

            GM and Chrysler submitted viability plans to
the Obama Administration in mid-February 2009 to demonstrate how they would work
their way out of their financial difficulties.  At that time, the federal
government had already provided GM with a $13.4 billion loan and Chrysler with
$4 billion. The Obama Administration asked for viability plans on which it would
base further federal assistance. 

            The Obama Administration’s Auto Task Force,
in rejecting the companies’ viability plans in March, cited a number of steps
the automakers should accelerate, including reducing the number of
dealers.

            As part of its restructuring plan, Chrysler
terminated 789 of its 3,200 dealers in June 2009, and General Motors announced
that it would reduce its dealerships from over 6,000 dealers to 3,600 when
contracts expire in October 2010.  According to the National Automobile Dealers
Association, the GM and Chrysler dealerships slated for elimination have more
than 100,000 employees.

            Don Thomas, owner and president of Thomas
Motors in Moberly, MO, challenged GM’s decision to terminate his lease without a
thorough review by saying, “We strongly feel the wind down of our dealership has
certainly not been based on objective criteria. If we were afforded a legitimate
review based on objective criteria, there would be no question our dealership
would be granted a continuing franchise with General
Motors.”