WASHINGTON - The chiefs of General Motors Corp. and Chrysler L.L.C. told skeptical lawmakers yesterday that they had too many dealers to support their slimmed down operations and that sacrifices must be shared as they fought to overcome bankruptcy and survive.
The executives acknowledged that slashing dealerships was causing pain in communities around the country.
"This is our last chance to get it right," GM president Fritz Henderson told the Senate Commerce Committee. He said these were "tough times for everyone in the GM family."
Chrysler president James Press told the panel that his company was "working hard to achieve a soft landing" for dealers. But if underperforming dealers are not selling cars, the company cannot return to profitability, he said.
His company said last month that it would withdraw the franchises next week of 789 of its 3,200 Chrysler, Dodge, and Jeep dealers nationwide, including 11 in the Philadelphia area. GM announced plans to end its franchise agreements by next year with about 1,100 of its 6,200 dealerships, but it did not publicly identify them.
Committee Chairman Jay Rockefeller (D., W.Va.) suggested that both companies were abandoning customers and dealers, some of whose families had been in the business for decades.
"I don't believe that companies should be allowed to take taxpayer funds for a bailout and then leave local dealers and their customers to fend for themselves," Rockefeller said.
Two small-town dealers spoke of the anguish ahead.
Russell Whatley, a Chrysler-Dodge-Jeep dealer in Mineral Wells, Texas, told the panel his grandfather opened the business in 1919. "A 90-year investment is just gone," he said.
Peter Lopez, a GM and Chrysler dealer in Spencer, W.Va., said he had met every financial obligation put forth by Chrysler and GM, but still "they want to shut me down."
He told the panel: "I am the face of GM and Chrysler in my town. It's unbelievable how we have been treated."
The executives of the struggling companies said there were too many dealers, with many representing the same manufacturer competing with one another for sales. After hemorrhaging customers for decades and losing market share to foreign competitors, the two automakers said their companies needed to scale back all their operations to become leaner and to return to profitability.
Lawmakers argued that the dealership closings would put thousands of people out of work and offer few savings to GM or Chrysler, which have received billions in federal aid as they try to restructure.