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GM, Chrysler Execs Defend Dealer Cuts

Hold their own during hostile Senate reception.

by on Jun.04, 2009

GM CEO Fritz Henderson (shown here) and Chrysler V.Chairman Jim Press faced a hostile Senate committee but held their ground on planned dealer cuts.

GM CEO Fritz Henderson (shown here) and Chrysler V.Chairman Jim Press faced a hostile Senate committee but held their ground on planned dealer cuts.

This time of year, it’s pretty hot and humid in Washington, D.C., but things were downright chilly, on Capitol Hill, if nonetheless sticky, when senior General Motors and Chrysler officials were put in the spotlight during a hearing on the planned cut, by the two makers, of nearly 3,000 U.S. car dealers.

“There’s been double-dealing going on,” proclaimed New Jersey Democrat Frank Lautenberg, as he suggested to GM CEO Fritz Henderson and Chrysler Vice Chairman Jim Press that they “must have a terrible conscience right now” for cutting so many dealers.

The wording was ironic, and more appropriate than Lautenberg might have intended, for the executives held their ground, during the tense session, insisting that they indeed do have double-dealing going on, with too many retailers chasing the same GM and Chrysler customers, and not spending enough of their time and energy trying to draw business away from the competition.

“This is our last chance to get it right,” said Henderson, “to fix permanently those parts of the business that have diverted us from consistently building winning cars and trucks and the consumer experience to math.”

According to Henderson, it costs about $1,000 per dealer in advertising and various other forms of support.  Reducing the number of showrooms would cut that figure sharply, the industry claims, though dealer backers insist that retailers actually cost little, if anything, for the manufacturers. (more…)