LaTourette, Boehner say White House should suspend GM dealer closures

4:37 AM, Oct 26, 2010   |    comments
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LaTourette released more details today during a press conference at Sims Cherolet on Mayfield Road here.

He was joined by Mark Sims and other local auto dealers and dealership advocates, including Alan Spitzer, founder of the Committee to Restore Dealer Rights.

Three Ohio dealers are seeking to vacate their arbitration rulings, and return to arbitration armed with new evidence from a federal SIGTARP report on dealer terminations.

One NE Ohio Chevrolet dealer was terminated by GM just shy of its 100th year in business, and is believed to have been the longest continually running Chevy dealer in GM history.

Mark Sims is one of two NE Ohio Chevrolet dealers who could soon be stripped of his dealership, and the other dealer is in Boehner's district.

Democratic Congressman Dennis Kucinich said the three dealerships are Halleen Chevrolet, Andy Chevrolet (called Sims Chevrolet) and Rose Chevrolet.

Kucinich has requested that GM wait until the arbitration decisions can be reviewed by the relevant courts. He wrote to the General Motors Chairman and CEO, Mr. Daniel Akerson, asking him to intervene and prevent the closure of three area GM dealerships.

"If General Motors terminates those dealerships on October 31, the impact on those businesses, their employees and their communities will be devastating. General Motors should not take such final and harmful actions to these dealerships, and to any dealerships whose arbitration decisions involve the same defects, while the legal and factual validity of the arbitration decisions are still in question," wrote Kucinich in the letter.

GM, which received nearly $60 billion from taxpayers, opposes the efforts, and has sued Sims and the other Ohio dealers in U.S. Bankruptcy Court in New York.

On Friday, LaTourette and Boehner sent letters to President Barack Obama, Treasury Secretary Timothy Geithner and Neil Barofsky, Special Inspector General of the Troubled Asset Relief Program (SIGTARP).

The lawmakers asked that GM dealers slated to close at the end of the month remain open while investigators look at the dealer termination process.

"There is too much at stake to proceed in an atmosphere where dealers were denied so much crucial information in a process rife with secrecy," the lawmakers said.

"As the findings of this investigation may shed much needed light on the proceedings affecting hundreds of dealerships nationwide, we believe it is necessary to thoroughly analyze its results before continuing with the closures of hundreds of dealerships, and the potential loss of thousands of jobs."

LaTourette and Boehner are greatly concerned that a SIGTARP report on dealer terminations was released just days after arbitration ended in July, effectively denying dealers of vital information that could have assisted in arbitration cases, or efforts to reach fair and fully informed settlements with automakers.

The law that created an arbitration process, spearheaded by a LaTourette amendment, says dealers "may present any relevant information during the arbitration."

The Ohio lawmakers said the SIGTARP report found that GM didn't document meetings where dealer termination decisions were made, and GM was inconsistent in following its stated criteria for closures.

The head of the Administration's Auto Task Force told SIGTARP officials that dealerships could have been spared from closure, but doing so would have been "inconsistent with the President's mandate for shared sacrifice."

One GM official also told SIGTARP officials that the automaker usually wouldn't save "one damn cent" by closing any particular dealer.

A recent Congressional Oversight Panel report found many of TARP's most crucial functions were effectively outsourced to private contractors, whose work is shielded from public view.

One consulting group was awarded a $7 million contract to help Treasury come up with a restructuring plan for GM that included more than 1,000 dealer closings.

The contract was for six months, but Treasury wanted the work done in three months.

WKYC-TV