Rockefeller Calls for Audit of General Motors and Chrysler Terminations

Requests TARP Inspector General to give taxpayers a thorough review of decisions that led to dealership closures

July 24, 2009

WASHINGTON, D.C. – Senator Jay Rockefeller has requested the Special Inspector General of the Troubled Assets Relief Program (TARP) review the methodology of the General Motors (GM) and Chrysler decisions to terminate more than 2,000 dealership franchises across the country.
“There is substantial confusion, even among dealers themselves, as to how GM and Chrysler selected dealerships to terminate and what benefits, if any, they might gain by doing so,” Rockefeller said. “In light of the impact these closures have on communities across the country, as well as the fact that both companies have received billions in taxpayer supported funding, I believe the American people deserve to understand what led to these decisions.”
As Chairman of the Senate Committee on Commerce, Science, and Transportation, Rockefeller held a hearing on June 3 regarding the closures. Among those testifying were executives from GM and Chrysler, a representative from the National Automobile Dealers Association, and two dealers whose franchises had been selected for termination.
Following the hearing, Rockefeller sent letters to GM and Chrysler, demanding fair treatment for dealers, workers and consumers. As a result of Rockefeller’s demands in the letters, the companies made a number of key promises:
  • Chrysler committed to having all terminated dealers’ vehicle inventory purchased at cost, minus a $350 fee, and to consider creating companion service facilities to service vehicles in areas without coverage.
  • GM worked with the National Automobile Dealers Association to modify Participation Agreements to alleviate dealers’ concerns about their rights under state franchise laws.
  • Both companies agreed to offer terminated dealers first consideration of new dealerships that are opened and to assist dealer technicians in finding new employment opportunities.