GM, Chrysler say slashing dealerships was necessary

WASHINGTON - The chiefs of General Motors and Chrysler told skeptical lawmakers on Wednesday they have too many dealers to support their slimmed-down operations and sacrifices must be shared as they fight to overcome bankruptcy and survive. They acknowledged that slashing dealerships is causing pain in communities around the country.

"This is our last chance to get it right," GM President Fritz Henderson told the Senate Commerce Committee. He cited "tough times for everyone in the GM family."

Chrysler President James Press said underperforming dealers are making it hard for his company to return to profitability.

Still, he said, Chrysler was "working hard to achieve a soft landing" for them.

"I think 'soft landing' is wishful thinking," said Sen. Frank Lautenberg, a New Jersey Democrat, as committee members channeled a multitude of complaints from home state GM and Chrysler spurned dealers.

More than 2,700 dealerships are in line to lose their franchise. Two small-town dealers invited to appear before the committee spoke of the anguish ahead. About two dozen others were in the audience.

Russell Whatley, a Chrysler-Dodge-Jeep dealer in Mineral Wells, Texas, told the panel his grandfather opened the business in 1919. "A 90-year investment is just gone," he said. He called Chrysler's actions "wasteful and devastating."

Peter Lopez, a GM and Chrysler dealer in Spencer, W.Va., said he had met every financial obligation set by Chrysler and GM but still "they want to shut me down."

While GM is giving the dealers being cut loose until October 2010 to shut down, Chrysler gave its castoff dealers only a three-week notice that runs out on June 9.

Committee Chairman Jay Rockefeller, a West Virginia Democrat, asked Lopez if he could shut down his Chrysler operations on such short notice.

He could not, Lopez replied.