The Obama White House may soon be faced with a potentially no-win decision: whether to maintain its support of Chrysler and General Motors or give backing to those who contend the two automakers have unfairly issued death sentences to thousands of U.S. auto dealers.
Momentum is building on Capitol Hill, especially within the U.S. House of Representatives, to take action that would reinstate 789 Chrysler dealers who were summarily terminated as part of that maker’s recent bankruptcy. A proposed bill gaining ground on the Hill would also force GM to cancel plans to trim thousands from its own retail body.
The larger maker, which could re-emerge from bankruptcy by week’s end, hopes to trim its dealer network to as little as 3,600 from 6,100 last year, but GM is giving retailers up to 16 months to wind down their operations. So far, the maker says 98% of the dealers it is eliminating have signed contracts that will also provide financial assistance to ease the shut downs.