US Dealers Saga Continues

After both managed to exit bankruptcy, General Motors and Chrysler left behind a trail of discarded, or at least soon to be discarded dealerships. The decision to kill some 2,000 was taken, as both GM and Chrysler say, out of economic reasons and was the only way to insure the viability of the new companies.

Still, the battle is far from over, as an increasing support for the dealers begins to be seen in Washington. On Friday, U.S. Sen. Jay Rockefeller, D-W.Va., chairman of the Commerce Committee, asked for an audit to be conducted for both of the manufacturers.

"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 wrote in a letter, obtained by Reuters, to Neil Barofsky, special inspector general of the Troubled Asset Relief Program (TARP).

The House Financial Services Committee already approved a resolution requiring the US government's auto task force to turn over documents on dealer decisions and other matters related to this year’s bankruptcies.

The two manufacturers already stepped in and expressed their concerns about the recent developments, with Chrysler going even as far and saying it may face liquidation. Their worries even growing after the House of Representatives passed a piece of legislation which may reverse the termination of GM and Chrysler dealers.

According to the provisions of the new bill, the dealers would return to their previous status and will have to be taken to court by the manufacturers if they are to be closed. Still, the legislation faces the opposition of the Obama administration, who considers the dealer termination a necessary step.