GM closings likely will hit Pa. hardest
Under GM's plan, it will lose 90 dealers, more than any other state. It's also losing 53 Chrysler dealers.
WASHINGTON - Pennsylvania will lose more General Motors dealerships than any other state, according to details the company released yesterday on the planned shrinkage of its dealer network.
The bankrupt automaker said it wanted to withdraw the franchises of 90 Pennsylvania dealers.
The state-by-state totals were made public by the House Energy and Commerce Committee's oversight and investigations subcommittee, which held a hearing yesterday on the dealer shutdowns at GM and Chrysler.
Under withering criticism from panel members, executives of the two companies called the closings of hundreds of their dealerships nationwide painful steps needed to trim down to the appropriate size for a struggling industry.
Down-on-their-luck dealers countered that the closings would needlessly devastate their local economies and livelihoods.
"Many dealers and the communities they serve frankly feel blindsided," said Rep. Greg Walden (R., Ore.).
In the Philadelphia area, Chrysler this week pulled the franchises of 11 of its dealers. GM has not made public a list of the 1,323 dealers it wants to close nationwide, and yesterday was the first time it disclosed state totals.
After Pennsylvania, Ohio and Illinois would lose the most GM dealerships. Michigan, the company's home state, was sixth, with 58 dealers who will lose their franchises.
GM chief executive Fritz Henderson told the House subcommittee the cuts were "quite painful" but necessary to save more than 200,000 jobs at remaining dealers.
Chrysler deputy chief executive Jim Press said the 789 dealers cut nationwide were part of the shared sacrifices of the United Auto Workers union, bondholders, and others needed to avoid liquidation of the company.
"Going through bankruptcy was not our choice," he said.
The committee also heard from dealers such as Frank Blankenbecker III of Waxahachie, Texas, whose voice cracked as he recalled the hard work his father, a World War II veteran, undertook to build their family business.
"I am glad that he is not alive to witness this travesty," he said. "To have risked his life for a country that would do what they are doing would destroy him."
The carmakers' explanations won few converts among House members, who wagged their fingers at the executives and questioned their motivations. Many of the dealers, they argued, had been profitable and received little warning or chance to plead their cases.
"There's something wrong with a business model that basically says, 'In order to survive, we've got to crush our local dealers,' " said Rep. Peter Welch (D., Vt.).
Chrysler and GM announced their plans May 14 and May 15, respectively. GM is giving its dealers an opportunity to appeal the franchise withdrawal.
Among Chrysler, Dodge and Jeep dealerships, Pennsylvania has lost 53, followed by Texas at 50 and Ohio at 47.
Lawmakers said the cuts would hurt many rural communities, forcing consumers to drive long distances to have their vehicles serviced.
Dealers said the closings put 100,000 jobs at risk and charged the firms with failing to be transparent about how they reached their decisions.
States losing the most
State Number to
1. Pennsylvania 90
2. Ohio 79
3. Illinois 66
4. California 65
5. New York 60
15. New Jersey* 33
*Tied with Alabama
SOURCE: General Motors Corp.