Durbin Urges More Transparency into General Motors Restructuring Process
[WASHINGTON, D.C.] – Assistant Senate Majority Leader Dick Durbin (D-IL) today called on the CEO of General Motors, Fritz Henderson, to bring more openness and transparency into the company’s restructuring process while in Chapter 11 bankruptcy. As dealerships throughout Illinois are notified that GM does not intend to renew their contract, many owners are left frustrated and confused.
“A vibrant automotive sector is crucial to the future of our manufacturing base in Illinois and throughout the country, and I support the Obama Administration’s efforts to help GM restructure,” said Durbin. “But I believe that such a restructuring should be executed fairly and openly and should result in a dealer network that is able to reach potential car buyers.”
GM recently announced plans to drop about 1,100, or 20%, of its dealers when their contracts end late next year as part of a plan to cut about 40% of its 6,000-dealer network by the end of 2010.
[Text of letter below]
Fritz Henderson
President and Chief Executive Officer
General Motors Corporation
P.O. Box 33170
Detroit, MI 48232-5170
Dear Mr. Henderson:
I write to urge General Motors to close only those dealerships that cannot assist the company in returning to long-term profitability and to carry out any necessary closures transparently and equitably.
I understand that GM must fundamentally restructure while in Chapter 11 bankruptcy and that sacrifices must be made throughout the company’s operations to create a more nimble car company. If closures are necessary, I urge you to provide solid, clear information to those dealers on how decisions were made about their future.
I would appreciate your prompt response to the following questions:
- Are the dealership closure decisions being made based on the potential for a dealer to provide GM with future profits?
- If so, what criteria are you using to predict those future profits? Is your criteria tied to the existing Dealer Performance Scores, or is it based on new criteria?
- How is that profitability potential being communicated to the dealers at risk of closure?
- What process will be in place for dealers to appeal closure decisions, and how will those appeals be communicated publicly to ensure that dealers across the country are being judged equitably against their peers?
A vibrant automotive sector is crucial to the future of our manufacturing base in Illinois and throughout the country, and I support the Obama Administration’s efforts to help GM restructure. But I believe that such a restructuring should be executed fairly and openly and should result in a dealer network that is able to reach potential car buyers. Thank you in advance for your timely response.
Sincerely,
Richard J. Durbin
United States Senator
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