Rep. Chris Lee (R-26) is asking the government to step in and help save dealerships -- or at least the jobs they represent -- that have been slated for closure by Chrysler and General Motors.
In a statement, Lee said " the rapid and potentially disorderly elimination of thousands" of dealerships could put 150,000 people out of work.
Lee is asking the Treasury Administration's Auto Task Force to instead implement a plan that would allow for "market forces " to consolidate dealerships.
According to Lee's statement, "More than 60 members of congress, both Republicans and Democrats from districts all over the country, signed on in support of the letter.
Full press release after the jump.
Press Release:
WASHINGTON – Congressman Dan Maffei (D-NY) and Congressman Chris Lee (R-NY) are leading the effort to save local auto dealership jobs. Maffei and Lee wrote a letter to the Treasury Administration’s Auto Task Force, headed by Mr. Steven Rattner, to request the Task Force reconsider the forced closure of dealerships across the country in favor of a more flexible and transparent process that would allow for market forces to consolidate dealerships. More than 60 members of congress, both Republicans and Democrats from districts all over the country, signed on in support of the letter.
Congressman Dan Maffei said: “We all recognize that the economy is not favorable to the auto industry right now. We’ve seen layoffs from manufacturers and we expect to see more dealerships consolidate and close this year. However, forced closure of arbitrary dealers will not necessarily help automakers, and it certainly will not help our local economy. We are asking the Task Force to hold off on forced closures and allow more time for smarter consolidation and attrition of our local dealerships. These dealerships employ hundreds of people across our area in good-paying jobs, they sponsor our little league teams and our pancake breakfasts, they have been an integral part of our community for generations -- and all we are asking for is that they be allowed to make the best decisions possible for their businesses.”
Congressman Chris Lee added: “Hundreds of good-paying jobs in Western New York are tied to the future of local dealerships, and we can’t afford to lose them due to hasty decisions made in Washington. In many cases, dealerships are small, family-owned entities that are deeply connected to the communities they serve. We have asked the auto task force to take a long, hard look at this issue to ensure an open and transparent process that is fair to both the dealers and their customers.”
Bailey Wood, a spokesman for the National Automobile Dealers Association (NADA), commended this action by Congress: “Representatives Maffei, Lee and more than 60 of their colleagues recognized the important role that neighborhood auto dealers play in their communities. With the local auto dealer as the largest private employer in many small towns, the rapid disruption in the local job market will have an even greater negative impact on the local economy. A more balanced and fair approach to the inevitable consolidation of dealerships will be better for all parties, and we strongly encourage the Auto Task Force and President Obama take heed of the suggestions made in this letter.”
A copy of the letter is below. A list of those Members who co-signed the letter will be released shortly.
The Honorable Steven Rattner
Counselor to the Secretary of the Treasury
United States Department of the Treasury
1500 Pennsylvania Avenue, NW
Washington, D.C. 20220
Dear Mr. Rattner:
We are writing to express our serious concerns regarding the decision by the Auto Industry for the rapid and potentially disorderly elimination of thousands of Chrysler and General Motors dealerships. This action, if implemented, could put approximately 150,000 people out of work. Since these dealer reductions and its ripple effects would have a serious and adverse impact on the United States, we would like to ask you to inquire with the companies about their rationale for revoking franchise agreements with thousands of dealerships.
To justify these job losses, GM and Chrysler are apparently relying on a misperception that new car dealers create a cost burden to auto manufacturers. This is not true, on average reportedly almost all of an automaker’s revenue comes from dealers purchasing the automakers’ vehicles. Far from saving money, a rapid reduction in dealerships could very likely reduce GM’s and Chrysler’s revenue and market share.
Automobile dealers are one of the largest private sector employers in the United States, providing tens of thousands of local jobs and contributing millions of dollars in tax revenues to states. Auto dealers are anchors in communities throughout the country and many times ownership is passed down from generation to generation. In addition many auto dealerships are minority owned and have traditionally provided strong local community support. Each dealership creates an average of 52 neighborhood jobs and these positions typically pay twice the national average as other retail-sector jobs. Dealers have invested about $233 billion to create an auto sales network that provides a vast distribution and service channel for consumers. In fact, automakers created the franchise dealer network specifically to lower their costs, as they outsource virtually all costs associated with selling and servicing cars.
Last year, over a thousand auto dealers closed their doors for good. Further thinning of the dealer ranks through normal market, dealer-driven consolidation, and other forces is inevitable. The action being proposed has not taken into effect the impact on communities and workers, and without any evidence that massive and immediate dealer reductions are necessary to restore the financial health of GM and Chrysler.
We appreciate the enormity of the mission your Task Force has undertaken to help the auto industry. However, we are concerned the reduction of dealerships, at a time when the national unemployment rate is rising, is counterproductive policy. We respectfully request that the Auto Task Force urge the companies to provide more transparency and justification on forced dealership closures, revisit their decision and consider the damaging effects on local communities.
Sincerely,
______________________________
Daniel B. Maffei
Member of Congress
______________________________
Christopher J. Lee
Member of Congress
So let me get this
So let me get this straight.....Mr. Lee, you are a republican. And you want the government to tell the car companies what to do. I firmly believe you are wrong. And what makes you different from a liberal? That's right...NOTHING! As a registered republican, I am offended by your position.
Suck it up. He's trying to
Suck it up. He's trying to save 150,000 people from losing their jobs.
Letting the free market work
Letting the free market work instead of some government task force picking who lives or dies seems right to me.
Chris, it doesn't save those
Chris, it doesn't save those people from losing their jobs, though, it just drags out the process of seeing which dealerships will be able to pull through.
Charlie, you've got it backwards. Lee is asking the government to help decide what ones stay open, whereas otherwise it would be up to the car manufacturers to make the cuts.
Here's how it looks to me.
Here's how it looks to me. After refusing to pay the money for a dam, he now wants to protect the flood victims.
There's no black-and-white
There's no black-and-white free market vs. government intervention here. The auto makers desperately want a bailout, so they're doing what the _think_ Obama wants them to do.
If we could unwind the clock a bit, there would be no talk of a government bailout, no auto task force ... and let the market do what it's going to do. That would mean bankruptcy, perhaps total failure, but inefficient industries (such as, say, the newspaper industry, as well as auto) shouldn't be propped up by the government.
I posted this expecting it would prompt discussion, because Lee clearly isn't seeing that his proposal is no more free market than anything coming out of the Obama administration, or Congress or the Senate. Both branches and both parties are hell bent on getting the government involved. Government involvement does neither taxpayers nor consumer any favors.
Yeah Chris, suck it up! Who
Yeah Chris, suck it up! Who cares if free market capitalism is going the way of the 8 track player! Our great nation was built upon hard work, ingenuity, and FREEDOM! Freedom to succeed or fail, to live or die, that is the USA I know and love. You know who could've saved those 150,000 jobs?? How about the 150,000 UAW workers, who are greedy and pig-headed enough to think that they are untouchable! Welcome to the ripple down effect. Suck it up???? You're freaking joking, right?? Welcome to Cuba north! Barack Castro
Seems to me that the free
Seems to me that the free market is working in this case. If people were buying their cars, they wouldn't be shutting down any dealerships -- right?
Intervention in that process by the government would be failing to let the free market work -- no?
The government (Republicans & Democrats) is broken. Get these manipulators out of the way - then the free market will work. Business and the overall economy will suffer for a time because of poor decisions and practices. Then correction will come. The government is merely encouraging poor business practices by propping them up.
All this talk of "free
All this talk of "free markets" is great, but it's not what we should be focusing on here.
Have any of you looked at how many Toyota dealerships there are? Nissan? Hyundai? Kia? They are spread out all over the country. Sometimes you have to drive hours to get to one.
I have a Ford and a GM dealership in my village. If you have driven Transit Road through Lockport and Williamsville, you can see multiple Ford and GM dealerships.
The problem with domestic dealerships is that there are too many of them. Eventually, that business model was going to fail. Too much of a good thing can be a bad thing.
I would agree there are
I would agree there are probably too many big 3 dealerships across the country. However, the biggest part of the financial problems all three are facing are legacy costs. The automaker executives agreed to them over the years when negotiating union contracts knowing this but they just kept kicking the problem down the road and now we've reached the point where the road has ended.
As a country we are facing the exact same problem but on a much larger scale with Social Security. Everyone in DC knows it's unsustainable in it's present form but absolutely nobody wants to admit that, or worse yet try to fix it and risk losing that voting bloc. FDR never intended Social Security to be anything more than a temporary measure in the first place. 70+ years is a heckuva long "temporary" period.
At this point "free market"
At this point "free market" is out the window. Free markets are by definition a creation of the social structure and government providing a set of ground rules for competition. That's how we avoid monopolies, depressions, and how we try to avoid situations like the one we find ourselves in. Now, what's being talked about is how we can in effect cushion the blow of the auto industry's hard times, and insure the least amount of suffering and job loss while the industry retools and starts recovering.
Frankly, I'd sooner let the car manufacturers direct the process of shutting down dealerships; that way there might be some logic applied to it, rather than just randomly seeing which ones go out of business.
Bud, I think you need to listen to more facts and less Rush Limbaugh. The UAW has been making concessions for years; however, the industry has resisted systematic change because corporate leadership by nature only looks at the short term. Were it not for the fact that they never invested in fuel efficiency, and the economic crunch, the car industry would still be running.
Andrew, actually Social Security wasn't intended to be temporary, it was just intended to be a safety net for people who otherwise lost or couldn't build their retirement savings. Unfortunately, the lack of good reliable jobs that include pension benefits has meant that a lot more people have been forced to rely on in. Fortunately, Social Security isn't broken by any means--it just needs a little tweaking to get it through the Baby Boomers' retirement.
Social Security was
Social Security was implemented as it was under the premise most people wouldn't live well into the collection of benefits period. The system needs more than a "tweak". There is vastly more money coming out than going in and SS has been unsustainable for some time. Anyone under the age of 50 thinking it will be a safety net for them in their golden years is deluded.
Adama- I haven't listened to
Adama- I haven't listened to Rush in years- a little too moderate for my taste. I like my conservatism to appeal to conservatives, and I don't care about much else. As far as the UAW, concessions were too little, too late. And I don't disagree that management has their share of guilt. My whole point is....THIS ISN"T A COMMUNIST NATION! Government should have no say at all in matters of private business, except to collect their entitlements from them i.e taxes!
Bud, do you think that
Bud, do you think that companies should be able to, say, dump toxic waste without government involvement? Employ slave labor? How about execute striking workers?
Once you start looking at the sorts of questions raised by total "hands-off" capitalism, it collapses completely. As I said: "free" markets are by definition created by there being a social order and fair playing field, enforced by government. The idea that there can be a "free market" without government influence is a complete fiction perpetrated by people who want to make the idea of reducing safety regulations and worker protections more popular.
Of course there needs to be
Of course there needs to be rules. The govt should be 3rd party, objectively viewing from the outside perspective. When the same govt starts telling businesses who stays open, what company employees make annually, who can/can't work for a company...then that's the govt sticking their nose in where it didn't belong. i agree with sarbanes oxley, and I agree OSHA is neccessary. Obama should not be able to say who heads GM, that chrysler must shut dealers, and banks getting bailout money can pay execs a limited amount. That is not the way it's supposed to be, and I refuse to shut up about it.
Adama; The examples you gave
Adama;
The examples you gave all fall under the "promote the general welfare" premise of the US Constitution. Insisting banks take federal money even though they don't want it, setting wages and benefit packages for CEO's, or telling investors of a privately held company their rights as lien holders have been invalidated are not.
Well, I think we can now
Well, I think we can now suppose that my friend Bud won't be voting for Lee next time. If Limbaugh is too moderate, then Lee must be off the scale!
Bud, I encourage you to test your views with the voting public in the 26th District by running against Lee in the next primary.