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GM accused of forcing dealers to oppose bill seeking to overturn closures

07/13/2009, 12:48 PM

By Drew Johnson

Support is growing on Capitol Hill for a bill that would reverse General Motors’ decision to earmark about 2,400 dealers for closure, but the Detroit automaker is reportedly using some shady tactics to help sweep the measure under the rug.

According to Automotive News, at least one U.S. Senator, a dealer group and dealer representatives have accused General Motors of strong-arming dealers into signing a letter of opposition against the bill.

“Some dealers fear that GM could take action against them if they do not sign a letter of opposition” to the bill, Sen. Charles Grassley, R-Iowa, said in a letter to GM CEO Fritz Henderson. “It’s alarming to have GM corporate leaders force dealers — some who are losing everything they worked hard to build — to take an active stand against it.”

If passed, the bill would reinstate those dealers eliminated during bankruptcies at General Motors and Chrysler. GM plans to cut about 2,400 dealers nationwide while Chrysler has already eliminated 789 U.S. dealers.

The GM National Dealer Council sent out a letter for dealers to sign on July 6th that said: “I agree with the National Dealer Council’s position to NOT support the passage of HR 2743.” Several dealer groups have vowed not sign the letter, calling GM’s initiatives “heavy handed pressure tactics and veiled threats”.

GM has yet to fully respond to the accusations, but we expect more on the subject in the coming days.

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07/13, 12:57 PM

posted by:

johnnycanuck

Mafia Motors?

07/13, 12:57 PM

posted by:

carstuff

GM needs to decrease the number of dealers. The dealers know this. They just do not want THEIR dealership to be the one shut down. Nothing wrong with that.

The GM National Dealer Council is a group of dealers who get together and represent all the dealers in dealing with GM on issues like Marketing, incentives, product and in this case how to have a strong dealer network.

The dealer reps sent out the letter to the dealers they represent to sign that says the GM dealers support having fewer dealers and not support the bill.

I would like to know exactly what the “heavy handed pressure” is.

07/13, 12:58 PM

posted by:

iluvamcars

I am with GM. They cannot afford to keep these sealers open. The dealers thay cut are all under-performing and really do not need to stick around.

07/13, 12:59 PM

posted by:

ihustle

“Shady tactics” sounds like Goverment Motors to me.

07/13, 12:59 PM

posted by:

murphy1

does this surprise anyone? ill bet its mostly pontiac dealers too, just sickening. and what about the proposal to buy pontiac buy a group of dealers? swept under the rug gm style. i dont trust anyone there anymore….

07/13, 1:04 PM

posted by:

zfenderguy

You mean you ever trusted GM to begin with? “Yeah, that steel’s galvanizeed. HA HA HA!!!”

07/13, 1:06 PM

posted by:

05Z88Path

GM should say, “Sure stay open if you want…but we’re not selling you any cars!”

Look everybody knows dealers must close…it sucks…but it’s what has to happen…

07/13, 1:16 PM

posted by:

Need more oil for GM

GM is doing nothing wrong. The only shady business practices come from those slimey Japs. This is nothign more than a smear at America and GM.

Be American. Buy American. Buy GM.

07/13, 1:40 PM

posted by:

Need more oil for GM_

On second thought, maybe they are. This shouldn’t be looked at as a smear; simply an allegation that should be probed. Besides, buying foreign really isn’t that bad.

Buy whatever you want.

07/13, 1:45 PM

posted by:

idrinorbarsaku

Sounds like the old, familiar GM to me!! I will never support gm! It is only FORD if I have to buy american!

07/13, 2:09 PM

posted by:

ihustle

“GM AN AMERICAN CATASTROPHIE”

07/13, 2:12 PM

posted by:

QR25SpecV

Let GM run their own business. The government shouldn’t be interfering even if they are going to tank.

07/13, 2:26 PM

posted by:

Dante_JoseCuervo

that is genius NMOFGM_ , brilliant.

07/13, 2:26 PM

posted by:

RaineMan

Why do we suddenly want GM to keep all their dealers open?

Can we reopen Pontiac, buy back Saab and Saturn and Hummer while we’re at it?

Let’s all pretend like this shytestorm never happened and we’re not going to be paying for it for the next 50 years.

Put GM back to the way it was in 2007… that’s a great idea… right?

07/13, 2:55 PM

posted by:

JakeK66

Can’t dealers all just get together and run themselves out of business like normal? I wouldn’t mind seeing Dean Team and Suntrup auto groups being taken out in the StL.They can both take all their coked out salesman and very shady dealer practices and be stripped of their franchise contracts.

07/13, 2:57 PM

posted by:

leftwingagenda

no offense to the dealers on the board, but imo the dealer cuts are necessary and non-negotiable…i welcome anything to reduce the overhead of the company that will increase efficiency and return gm to profitability asap so that repayment can begin…

07/13, 3:14 PM

posted by:

chryslercurse

Gangster Goverment

07/13, 4:34 PM

posted by:

injunraiv

GM did indeed ask for my support to their opposition this bill (disguised as a plea from the dealer council), but no one ’strong armed’ me into signing any petition.

07/13, 5:53 PM

posted by:

fishsticks

“We are acting as reluctant shareholders because that is the only way to help GM succeed,” Obama said of the temporary nationalization of the 100-year-old company.

“What I have no interest in doing is running GM,” Obama said. His only goal, he said, was to get GM back on its feet and then “to get out quickly.”

“GM will be run by a private board of directors and management team,” Obama said. “They — and not the government — will call the shots and make the decisions about how to turn this company around. The federal government will refrain from exercising its rights as a shareholder in all but the most fundamental corporate decisions.”

Anyone who thought a government stake was not going to lead to a politicization of it’s operations was sadly mistaken.

As I said when this “takeover” or “bailout” occurred, no good will come of this.

07/13, 5:58 PM

posted by:

carstuff

fishsticks, I have no idea what this has to do with the article.

07/13, 6:26 PM

posted by:

fishsticks

This is the politicization of a private business – the point is these decisions were supposed to be made by GM and not Congress. This “strong arming” is a symptom of the bailout problem. Obama pledges one thing then politics get involved and Congress makes him look bad.

07/13, 6:50 PM

posted by:

CarsNut

This is the f*cking dumbest bill I’ve ever seen. Keeping these dealers open for what? So that those sale men can sit with their thumbs in the a$$ all day?

07/13, 8:00 PM

posted by:

DrFill

Some politicians are making a big show out of fighting for local dealer’s jobs in their broke-ass state
Obama, Congress, GM, and the dealers, all know slimming down and being more efiicient is not a bad thing
That’s a good thing! :)

This is a political football thrown by some scrub politicians who don’t give a wit about what is best for GM
Only what matters in their state

I HOPE there are enough people in Washington with brains who can see clear to do the right thing and get GM competitive with the rest of Earth

Noise and traction are two different things in Washington.
Brains are usually in The Twilight Zone

If GM is doing this, good for them!
DrFill

07/13, 9:10 PM

posted by:

jayjc08

It’s gangsta government. Now their telling businesses how to be run, and giving them IOU’s in the great state of California!

07/14, 10:29 PM

posted by:

chevydealer09

As a chevy dealer that is being terminated(??? small town, never lost money, 5th in my state in CSI, 1st in my state in required Chevy training standards), the newest one is I also received a phone call from GMAC today…..informing me that although GM has given me til October 2010 to wind down my business, THEY (GMAC)want me to wind down much sooner..they will be shutting down my floorplan….even though my audits have been perfect, and my new inventory is only 30 units, and my used inventory is nothing over 90 days old. As a bank, They couldn’t get a dealer that is in better shape inventory wise!…They are giving me until the end of 09 to move the rest of my new car inventory, or they are going to demand full payment on all of my inventory, which I have also been forced to personally guarantee……keep in mind that I am still doing 15k of warranty work a month for my customers, have almost 100k in parts they have made me purchase and won’t take back and have been profitable in my used car department, which they also floorplan. Collusion, no way! Wink wink! Congress, are you reading? This is absolutely insane, immoral, and unethical, and the absolute height of hypocracy! If GM had any type of morality, they would at least make sure that their terminated dealers could have until the promised date of October 2010 to sell their remaining parts and vehicle inventories, as well as service loyal customers who purchased cars with factory warranties, without having to travel up to an hour to get work performed. As terminated dealers we can’t order any other new car inventory, we have personal guarantees protecting GMAC, and have cash equity in every preowned car that GMAC floorplans for dealers. Enough is enough!

 
 
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