Washington – U.S. Senator Blanche Lincoln today said America’s automakers must be held accountable for their decisions to restructure and close franchise dealerships, which will eliminate thousands of jobs across the country, including Arkansas.
Last week, Chrysler LLC sent letters to eight dealerships in Arkansas informing owners they would be forced to close, affecting hundreds of Arkansas families and communities that depend on those businesses.
In a letter to Senate Commerce Committee leaders today, Lincoln said that auto companies, which have been the recipients of an extraordinary level of financial support from American taxpayers, should answer to dealership owners and their tens of thousands of employees regarding their restructuring process.
“Dealership owners and their employees deserve answers and they deserve an opportunity to play a role in the process,” Lincoln said in her letter to committee leaders. “Automakers should consult with dealerships to gain a full picture of their economic health, their outlook for long-term sustainability, and the number of employees that will be impacted by the decision. In addition, they should take into account the effect such dealership closures will have in individual communities and their surrounding areas, particularly the impact to consumers and their access to services.”
The Senate Commerce Committee is expected to hold a hearing with automaker executives following the Memorial Week work period. Lincoln’s letter to Chairman John D. Rockefeller, IV and Ranking Member Kay Bailey Hutchison is copied below.
Dear Chairman Rockefeller and Ranking Member Hutchison,
In recent weeks, I have heard from dealership owners from across my state of Arkansas who have been notified their franchises will be closed. Although I fully realize that these are troubled times for Chrysler and General Motors and that tough decisions are having to be made on a variety of fronts, it is of the upmost importance that these auto companies approach the decision-making process in a common-sense, practical way that will provide reasonable options and support for our dealerships, their employees, and their customers in the communities where they are located.
I commend your leadership on this issue and I am eager to hear from the executives of these auto companies at your upcoming hearing in the Senate Commerce Committee. It is imperative that these auto companies, which have been the recipients of an extraordinary level of financial support from the American taxpayers, are held accountable for their standard of business with their franchise dealerships and for the impact these decisions will have on so many people.
The dealership owners and their tens of thousands of employees deserve answers and they deserve an opportunity to play a role in the process. I respectfully request that when these auto executives testify before your committee in the coming days, you encourage their reconsideration of the restructuring process. Specifically, before making any final determination regarding which dealerships should potentially be closed, they should consult with dealerships to gain a full picture of their economic health, their outlook for long-term sustainability, and the number of employees that will be impacted by the decision. In addition, they should take into account the effect such dealership closures will have in individual communities and their surrounding areas, particularly, the impact to consumers and their access to service.
In addition, for those dealerships that ultimately are required to close their doors, additional steps should be taken to alleviate the burden on the business owners and to protect the employees. Twenty-three days notice is a completely inadequate amount of time for a business to shutter their operations and for displaced employees to find new employment. A reasonable period of notice of at least three to six months should be provided. In addition, the auto companies should repurchase or assist with the disposition of all inventory, parts, tools and signage owned by the business. Finally, all open accounts, which include incentive and warranty reimbursements owed to the dealership, should be paid in full before the closing date.
Again, I commend you for your leadership on this issue and for your efforts to ensure the auto companies are held accountable. I am hopeful you will be successful in gaining promises from these companies that they will do the right thing and will move forward with the restructuring process in a fair and responsible way.
Blanche L. Lincoln
cc: The Honorable Timothy F. Geithner, Secretary of the Treasury