WASHINGTON AND LOS ANGELES — A congressional committee added another layer of government oversight to the Obama administration's bailout of General Motors Corp. and Chrysler as senators grilled executives Wednesday over plans to use the corporate bankruptcies to close about 2,000 dealerships.
"I honestly don't believe that companies should be allowed to take taxpayer funds for a bailout and then leave it to local dealers and their customers to fend for themselves with no real plan, no real notice, no real help," said Senate Commerce Committee Chairman John D. Rockefeller IV (D-W.Va.), who convened a hearing on the issue.
The standing-room-only crowd -- including about 30 dealers and more senators than Rockefeller said he had seen at a committee hearing in 24 years -- gave weight to suggestions that the Obama administration's decision to take ownership stakes in the companies made Congress an unofficial corporate board.
"You find yourself with a board of directors of essentially 535 members," Sen. John Thune (R-S.D.) told GM Chief Executive Fritz Henderson and Chrysler President James Press. "We are now partners, and as partners these are the type of questions you get to answer."
Lawmakers acknowledged that they probably could do little more than make life uncomfortable for the automakers. But they also could spread that same discomfort to the Obama administration, which must balance congressional concerns with a vow not to get involved in the daily operations of Chrysler or GM.
Thune and some other senators said they were leery about delving into the inner workings of the companies. But they agreed the pain and job loss that the dealer cuts would impose on communities was a tragedy. Two dealers explained the heartbreak they were facing as their franchise agreements with Chrysler and GM were being terminated.
"To be arbitrarily closed with no compensation is wasteful and devastating," said Russell Aubrey Whatley III, owner of a Chrysler dealership in Mineral Wells, Texas, that has been in his family for decades. "A 90-year investment is just gone and neither my family or my employees have nothing to say about it."
Like nearly every other senator, Rockefeller told of calls and e-mails from dealers in his state complaining about the cuts being enacted by GM and particularly Chrysler, which last month gave 789 dealers less than three weeks to liquidate their vehicles, parts and specialized tools before their franchises are terminated Tuesday.
