[Congressional Record Volume 155, Number 89 (Monday, June 15, 2009)]
[House]
[Pages H6784-H6785]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                  UNFAIR TREATMENT OF CAR DEALERSHIPS

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from Indiana (Mr. Burton) is recognized for 5 minutes.
  Mr. BURTON of Indiana. Madam Speaker, this last weekend, I met with 
several auto dealers in my district, and it was very interesting to 
find out really what all of them are going through right now.
  The Chrysler and General Motors companies are closing hundreds and 
hundreds of automobile dealerships across the country, and after 
talking to these dealers, I can't figure out why. It isn't costing the 
automobile companies anything. They sell the cars to the dealers and 
the dealers sell those to the consumer. And the dealers pay for those 
cars.
  In addition, the dealers pay for the advertising, the dealers pay for 
the plant and equipment, their dealerships, the buildings. They pay the 
mechanics. They pay the sales people. So the car company, all they do 
is make the car and sell it to the dealer. And so why are they closing 
all of these dealerships? It seems to me, as you reduce your sales 
force across the country, you're going to reduce the amount of cars 
that are sold to the consumer. It just doesn't make any sense to me.
  But let me tell you some of the things that these dealers are going 
through right now. One dealer told me that--it's a Chrysler dealer--he 
had a Dodge dealership. And Chrysler asked him a couple of years ago to 
buy another dealership that wasn't doing as well, and they asked him to 
not only buy the property but to upgrade the equipment and upgrade the 
property and upgrade the showroom.
  So he put $3 million into buying a property and upgrading the 
showroom in the mechanics area, the garage area. And after he did it, 
just recently, right after he got it done, had invested $3 million, 
they closed him down. They closed him down. He lost $3 million after 
they asked him, the company asked him, to invest that money in 
purchasing and upgrading this other store.
  Now, that's terrible. He put $3 million in it as the company 
requested, and then they cut the legs off from under him and he loses 
$3 million.

[[Page H6785]]

  I talked to a Chevrolet dealer who was negotiating with a GMC dealer 
across the street. The GMC dealer and the Chevrolet dealer were right 
across the street from one other, and General Motors said, Why don't 
the two of you combine? And so the two companies were negotiating with 
one another on who would buy the other out, and it was a $3 million to 
$5 million purchase. Well, they couldn't reach agreement before the 
deal with General Motors took place, and they were going to close a 
whole bunch of dealerships. So what they did is they decided to close 
the dealership of the Chevrolet dealership down even though he was very 
profitable.

                              {time}  1945

  And what that means, simply, is the GMC dealer across the street is 
going to get this Chevrolet dealership that would have sold for $3 
million to $5 million to him for nothing. And so this dealer is going 
out of business, and it's going to cost him $3 million to $5 million 
because they closed his dealership. He sold as many cars as they asked 
him to sell, he was up to snuff on his payments and everything else 
that was requested by the company, and they knocked the legs out from 
under him as well, and it cost him $3 million to $5 million.
  There was a GM dealer that came to me at this meeting the other day, 
and he had eight dealerships, and they closed one of them down. It's 
going to cost him several million dollars. But he can't complain 
publicly because GM is going to be closing other dealerships down in 
the future, and he's afraid if he says anything they will close some of 
his other dealerships down and cost him more money.
  You know, I just don't understand this. We have the government, the 
car czars, if you will, now taking control of the entire auto industry. 
They're forcing the executives of the companies out of office and 
replacing them with handpicked people by our government through the car 
czar and the Auto Task Force. So the government is taking over the auto 
industry and closing these dealerships, putting hundreds of thousands 
of people out of work, closing thousands of dealerships across the 
country, and actually hurting the American auto industry's ability to 
sell cars when they're in competition with car companies around the 
world. It just doesn't make any sense to me.
  So, once again, here we have the government taking over an industry, 
socializing the auto industry, and really killing an awful lot of the 
people who work in it--not to mention the restaurants and the stores 
that surround these car dealerships who have been in business as well, 
and it's going to cost them jobs.
  Government control of the private sector just destroys the private 
sector. And they want to now take over our health care industry. 
They're taking over the banks. They want to take over the energy 
industry with cap-and-trade, which is going to cost every family in 
this country $3,000 to $4,000 more per year for energy.
  We don't need socialism in this country. We certainly don't need it. 
And here's an example, the car industry, of what happens when 
government takes over.

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