Dealerships, automakers clash in capital

WASHINGTON, June 12 (UPI) -- Automakers in Washington said they would save billions of dollars closing auto dealerships at a hearing where small town business clashed with big industry.

General Motors Chief Executive Officer Frederick "Fritz" Henderson said the industry "cannot undergo this sweeping transformation without a comparable effort to remake our retail network."

James Press, president of Chrysler, told House Energy Committee members "today's automotive industry cannot support the number of dealers currently in the marketplace."

Chrysler sold its best assets to Fiat of Italy this week. It's bad assets remain in bankruptcy court, where the company was given permission to shed 789 dealerships. GM, also in bankruptcy, plans to close more than 1,000.

But dealerships found lawmakers sympathetic to their plight.

Rep. Frank Kratovil, D-Md., has introduced a bill that would reverse the decision to close dealerships. Government intervention amounted to a "bailout for the big guys, but a force-out for the little guys," he said.

In addition, the Senate Commerce Committee recommended Chrysler give dealerships a chance to appeal their closures. The committee also urged carmakers to give closed dealerships first rights to buy in if companies return to dealership expansion.

Maryland dealership owner Rick Shaub, nonetheless, said auto retailers were in an uphill battle.

"I am not sure this is going to do any good," Shaub told the New York Times Friday.