tv [untitled] CSPAN June 7, 2009 3:00pm-3:30pm EDT
we did our darnedest and we@@@@ >> what ever they bring, you pay us the difference and there you go. >> we had published the release, exactly how much money they were paid. they were paid everything that they had in the car except for the charge for inspection and transportation. . inspection and transportation. and in fact we do not plan to have the dealers left with the cars. we must take them so we can control all the residual values and put them back into our system. as i said, right now, our inventory is the lowest it has
ever been and we're not building cars there is a substantial demand for these vehicles. and i think the disconnect may be only talking to those dealers, trying to preserve a legal case who have not signed the release. that would be the same information, but the bulk of information, but the bulk of these dealers who have signed release, they would have good information. and i would love to keep communicating with these gentlemen. >> senator hutchison, i did sign the release and i was inform by the business center, mine was the very first one in. so they had plenty long enough to get me a report. >> can i just count, mr. press, on your word today that you have made in this public forum to every dealer who has signed an agreement that they don't have to sell at fire sale prices and they don't have the fear that has just been stated by both of these dealers? >> absolutely, yes. >> thank you. >> thank you. >> we have been joined gloriously and happily by senator bill nelson, who has not
even had a chance to ask a question, much less make an opening statement which i know he's not going to do. >> mr. chairman, i did not make an opening statement. i'll submit it for the record. but i just have one question, and i'd like to address this to the two ceos. between the two of your companies, you received $80 billion in bailout. and you have now, between the two of your companies, requested another $36 billion. that's $116 billion. now, if you quibble with the numbers, whatever it is, it is large. and so what i would like you to
address, because of the failures of the management of your two companies, a lot of people are losing their jobs. and i would like for you all to address the mechanics that are losing their jobs, the clerical workers, the kids that do the detailing of the cars, the sales men. and please share with them where did all that bailout money go? ? 2349 case of general motors, the money received so far, senator, have been used to finance the losses that we have incurred this year. and late last year. and with respect to the monies that will be dispersed to us pursuant to the bankruptcy, it would be our expectation to use it to fund losses and
restructure the business. that's how the monies will be used. >> i can't confirm the amount. i think our company is around $15 billion or so. so i'm not sure what the amount is. from our standpoint, we're spending about $100 million a day of d.i.p. financing through the bankruptcy. that's one of the reasons we need to get through that, that's taxpayer money. and we utilize the initial funds for the fact that because of the meteor hitting the industry and we're in a depression, there is insufficient volume to be able to pay the cost to keep the companies afloat. we did find and were given the approval for an alliance and a new company to be formed with fiat that will give us a new product line, a new company, a new start, and a return on that investment to the taxpayers that will be much better than most investments they'll have. >> senator, just to clarify, also, our number is big, so your second point is absolutely right. i didn't understand where the
first number came from, but that's beside the point. your point is absolutely right. it is our responsibility, as is in chrysler's case to justify not only the support we provide by the u.s. taxpayer, the canadian taxpayer, the taxpayer of ontario, to justify the confidence to perform, to deliver val ya for them, and to make the sacrifices that are being made today worthwhile so we only do it once. thank you. >> well, you say we have to ask ourselves the question in trying to protect the interest of the american people. we committed an awful lot of taxpayer money to try to save all those jobs that are now being cut. and a lot of the condition that you find yourself in is because
the executives were too hard headed over the course of the last three decades when many of us were begging with you to make higher miles per gallon, to do cars that would be revolutionized the transportation system of personal people, and that would compete with what you saw was happening. but you wouldn't do that. and each year, when we try a simple little thing like raising miles per gallon, a combination of the automobile lobby, aided and abetted, i might say, by the dealers, in combination, in cohort with the oil industry,
beat us back every time. if it -- if it had anything to do with higher miles per gallon, we got beat. as a matter of fact, on most of the innovations, the automobile industry of america was the last to bring in an innovation. and let me give you an example. back in the early 1980s, we had forced the automobile industry to start experimenting with air bags. and there just happened to be, in one of those experimental vehicles, that the owner did not know because it was put in there for that purpose. a grandmother and her granddaughter in a head on collision on highway a1a in satellite beach, florida, and the grandmother and the granddaughter walked away from
the wreck. what dramatic testimony on behalf of air bags and yours truly who was a member of the house of representatives at the time begged and begged to get air bags because there was demonstrable truth that it worked. but, no, it was too costly, the american public didn't want it, and so forth. it is another indicator of the choices of management that have led us to this day where $116 billion of taxpayer money is going in and people are still losing their jobs. so, mr. chairn, i get a little worked up. but i don't like to see our people suffer like they are. i don't like to see -- it was earlier talked about, chrysler and dodge, as i understand it, you are all working something
out. they're hispanic. you want them to move to another location. but you're still going to put them on the list next week. i don't like to see sunshine dodge going out with all those jobs. this, of course, is personal to us because we live in those communities. and here we are, the united states government, having been seduced and cajoled and fooled, mr. chairman, for years and years, and it led us to this poi point. >> very well said. senator klobuchar? >> thank you very much. i'll be brief here. i just wanted to make one point that i had heard from some of my colleagues here about being uncomfortable because of this unique situation and i just want all the witnesses to know we had hearings like this before that don't involve companies that have received government funds. we had hearings about -- i was
thinking back, we had one on the newspaper industry and how we can try to figure out if there is changes to the laws to help them. we had hearings on the delta northwest merger hearings on pro sports player and their pensions, so i just wanted to say to the chairman, i don't think it is uncomfortable to be talking about this. we would rather not. we would rather not be here now, but our job as a commerce committee is to deal with people's jobs and companies and the livelihoods of people. so i just wanted to make that point because people have kept saying about their level of discomfort. this is what we're supposed to be doing. and along those lines, my focus here are on -- i mentioned some of our dealers here, laurel nelson, a lot of women dealers as well, and george mcgwire from shockapie. these people haveare very focus just trying to figure out what we can do here. and so just to summarize here
what we have here is some commitment that we will -- a commitment that from chrysler that in fact it is very clear you're going to redistribute these parts and they're not going to have to pay cheaper prices, is that right? and can you tell them they're going to be sold? >> we will tell them that they will be redistributed. both the vehicles, the parts and the special tools. >> but you're not -- you can't commit that they will be sold, even though they bought them, some at your urging? remember when -- there were a number of dealers that were told please buy these to keep chrysler alive back earlier in the year so they bought more cars than they might have otherwise? >> we will redistribute -- redistribution would be selling those dpracars from the dealers going forward to the dealers that are going forward. >> what do you think the chances are that they will be sold, redistribute to you means 100% commitment they'll be sold? >> they'll all be redistributed. >> okay.
sold? >> redistributed. >> guaranteed. >> they will all be redistributed, they will all be sold to other dealers if that's the -- i don't want to get caught up -- >> they'll get their money. >> they will get their money for all of the cars. >> then -- i'll get what i can here, mr. henderson, also, you said that you would commit that this appeals process would happen and that you have already said that a few of the decisions have been reversed. i don't think anyone is polly annish about this, but gm will be looking at these decisions and in good faith? >> senator, you have our commitment in that regard. >> all right. and then your situation is that if these people sign the agreements that they then -- the cars you're going to buy back, these cars and parts -- >> in the case of -- if they sign the winddown agreements, they'll sell down over a 16 month period, they'll sell down the cars and the parts. >> and then we -- we don't want to get here, but if they do close down and they do reopen,
you won't commit to them that it will be them but they will be in the running? is that what you're saying. my guess is they're going to have a dealership in waco. >> he just guaranteed to senator rockefeller ten minutes ago. >> okay. very good. well, thank you, mr. lopez. i'm just summarizing everything. it is always good to get it once, twice or three things, don't you think, like all those signatures you require when we buy cars. so the -- so the plan here would be that they would be able to be a dealer and we feel we have some profitable dealers in minnesota that would be very interested in doing that. so that's -- any other commitments that we can get here for helping these guys? >> on our continuation agreement, we will be meeting with the nada this week to -- friday, actually to address their concerns about our continuation agreement for those
dealers going forward with us. thank you. >> okay. very good. one last question, just for you, mr. press, i know it is getting late, for -- did fiat require you guys to reduce the number of dealers? >> fiat did not require a number. the agreement does have a new dealer organization, viable dealer organization going forward as one of the requirements and we're producing that. they did not require a reduction. >> all right. okay. thank you. thank you for your time. >> thank you, senator. our final question will be from senator johanns. >> mr. chairman, thank you. how many, mr. press, how many minority dealers are going to be put out of business by your action here? >> the minority dealer reduction is exactly the same of the total dealer body reduction. the share of dealers that are minority dealers increases a small amount. >> not from the in share. raw numbers.
tell me how many are going to be out of business. >> 38. >> 38. mr. henderson, how many minority dealerships will be out of business because of your action? >> of our 230 minority dealers, we're in the brands that will go forward with us, 44 will be affected by this action or 19%, which is less than the average, sir. >> okay. you talk about the auto task force putting pressure on you to close more dealerships, the report on march 30th criticized you for not being aggressive enough. did you have a plan or a notion prior to march 30th as to how many dealerships general motors would close? >> two things changed, sir. one is we actually accelerated our brand rationalization so, for example, we dropped the pontiac brand which brought forward a series of actions that we otherwise would have taken later, number one. number two, our plan called for us arriving at about the same level of dealers in the end of
our business plan period which was 2014 and the view was that was too lock, you needed to move faster on this which we did and so we will arrive at roughly the level that was in our original plan of 2014 by 2010. >> you've aggressively accelerated it as a result, partially, at least, to the criticism you've received from the task force? >> we knew what the right business decision was. the question is what time. so, yes, we took the action because we thought it was the right thing to do. but, in fact, we needed to and did take into account the findings of the task force. >> so as a result, how many dealerships that might have been given three, four more years are now accelerated? >> well, some part of them, again, as i said, senator, were driven by brand decisions, so those were company decisions, had nothing to do with the task force. and with respect to the acceleration, it would be hard for know actually put the number on it, but i would think you
would say probably 500 to 1,000. >> 500 to 1,000? >> yes. >> and i'm assuming, you know, today, although i would prefer not to say this, today i represent 1.7 million people in nebraska who own your company. 60% at least when it is all said and done. i don't think most of them want to own your company. but having said that, i'm assuming that when the government now speaks, you're going to pay attention. after all, we are the owners. >> in our case, sir, with 60% held by the taxpayer, we absolutely need to respect that, yes. >> okay. now let me ask you another question, if i could. state franchise laws, i'm a former governor. we worked with these dealers. you know, they worship with us, they buy groceries with us, they're part of our community. and i will tell you personally, i buy vehicles based upon the trust they create, not on the
fanciness of their dealership, to be very blunt about it. i think most people feel that way. so when you look at going forward, how are you going to factor in small communities where maybe they're not selling a lot of cars, but they're contributing to the community, they do support the softball program, or are they just out of luck now? >> senator, as i said, in the case of general motors, of about 3600 dealers in the midpoint of the range, i talked about 1500 of them will be in small towns in the u.s. and we will have, by far, the largest footprint still, even with the reductions. >> those jobs are nearly impossible to replace, having been a governor and a mayor, i can tell you that. let me wrap up with this. and i'll ask you both this question. i heard what you kind of represented in promise, but i have to tell you, just to be honest with the dealers in the room, i think you're going to walk out of this hearing today in 95% of what was decided
before this hearing started isn't going to change. they're still going to lose their dealership. we may work with them, you may work with them, not me, you may work with them a little bit more, but in the end, they're going out of business, aren't they, mr. press? and don't give me a long answer, the gavel is going to come down. just give me a yes or a no. >> yes. >> mr. henderson? >> yes, sir. >> thanks. >> thanks. >> those were thoughtful and helpful questions. in closing i should point out that senators lincoln and senator nelson of nebraska and senator cole of wisconsin had asked for the committee to pursue a line of questioning surrounding the closing of the dealersh dealerships, presumably, in
their states. without objection, these statements, questions on their part will be a matter of the record. also without objection, all full statements of the committee will be included in the hearing record. and the advice of distinguished ranking member, if members have questions, further questions, they would like to be able to get them to you and have them, and this may be hard. but it can be done. have them answered by friday. are you willing to do that? >> yes, sir. >> finally i want to thank everybody for being here. it's a long hearing. there was a lot of emotion. a lot of things were said that
people didn't want to say. it was a tough hearing but it was sort of at the very fulcrum of where we are going in america. how are our systems working? how are we paying attention? and i consider it a very valuable hearing. i consider the audience very could you tellous audience and the panel, all of them, helpful and straightforward with us. having said that, this hearing is adjourned.qqqqqqqqqcqqqcccqqq
>> now, a briefing with senate republicans on the general motors and chrysler bankruptcy proceedings. we will hear from the chair of the conference, lamar alexander, on transferring stock not a companies to the government to taxpayers. this is a little over 20 minutes. >> we are introducing today the a lot of stock for every taxpayer act to require treasury
to distribute to individual taxpayers all the stock in the new gm and chrysler within one year following the emergence of the new gm from bankruptcy proceedings. this is the best way to get the auto companies out of the hands of washington bureaucrats and politicians and into the hands of the american people and the market place where it belongs. instead of the treasury and owning 60% of the shares in the new gm and 8% in chrysler, you would on them. if you were one of 120 million americans to pay federal taxes on april 15. this is the fastest way to get the stock out of hand to washington and back into the hands of the american people to pay for it. to keep it simple and to help the little guy get an ownership stake in america's future, treasury would give each taxpayer an equal number of the available shares. the treasury department has said it wants to sell the shares as soon as it can. but the president of general
motors said in a phone call with a number of us in congress a few days ago that this is a very large amount of stock and an orderly offering of the shares might take several years. these shares might not be worth very much at first, but put them away and one day they might contribute something to a college education. for example, general motors 610 million shares were worth only 75 cents just before bankruptcy. but they were worth $40 a couple of years before that and $75 a few years before that. already we are beginning to see what government ownership of car companies looks like. yesterday, the president said gm and chrysler spent four hours before congressional committees talking about dealerships. i assumed they drove themselves here in congressionally- approved methods of transportation, probably their own hybrid cars.
that man did not have the time yesterday to design cars, built cars, or sell cars. unless we get the stock out of the hands of washington, this will be repeated over and over and over and over and over and over again. nearly 60 committees and subcommittees that can summon the heads of the auto companies here to give them advice about how to do their job. car company executives who ought to be managing complex companies will be reduced to the status of an assistant secretary moving from subcommittee to subcommittee, calling briefing books. you can imagine what the questions would be next week. what is the next model going to be? what color will paint be? which plan should be closed? why did she opened one in my congressional district? how many cars should have flex fuel? what should the work rules be? what should the salary be in the executive offices? where can conferences be held? someone will want to know why the volt is buying a battery
made in south korea instead of in the congressman's congressional district. there will be linked to questions about the number of holidays, thousands of written questions demanding thousands of written answers. all of it under oath so that lots of lawyers will need to be involved. it is not just the congress we have to worry about. the president has already called the mayor of detroit and assured him that he is on his side in keeping the headquarters of general motors in detroit to the executives won't move it to warren, michigan. the mayor of detroit says he had plenty of conversation with members of the precedents on a task force to have assured him they are on his side as well. -- the presidents auto task force. then there's the treasury secretary and undersecretaries that want to keep up with what is happening to the $50 billion. there's an active economic czar and the white house these to be the president of harvard. there are epa officials who want
to be telling them what size cars to build. it was not long ago that the administration told general motors it was building to many suv's and the volt was too expensive to work and then the president himself fired president of general motors. giving the stock to taxpayers who actually paid for it is the only way to get the government out of the companies here and give them a chance to succeed. and, it will create an investor fan base of 120 million americans who are now stockholders in the companies who may be a little more interested in what the next model of chevrolet should look like. think about the fan base of the green bay packers whose ownership is distributed among the people of green bay. this is the fastest way to get back to the wise principle, if you can find it in the yellow pages, the government ought not be doing it. more than the money, it's the
principle. the other day, a visiting european automotive executives said to me with a laugh that he had come to the new american automotive center, washington d.c. for get the economy moving again, let's get the auto companies out of the hands of washington politicians and bureaucrats and back into the hands of american investors, the sooner the better. >> when he described this amendment was described to you, i said i have an amendment that will fit perfectly. so i have joined my amendment to his and we will be offering it as the alexander-bennett amendment. or as i suppose it will be known in utah, the bennett-alexandre amendment. there will be some time before the stock can be distributed.
he has anticipated roughly one year. in that time, the secretary of the treasury will be in charge of controlling the stock. my amendment will give the secretary of treasury by portion, will give the secretary the same fiduciary responsibility that any director or official in the company would have. talk about conflict of interest , it's not a good thing. the secretary of the treasury finds himself in a position of conflict of interest. he has his interest as the chief financial officer, if you will, of the federal government and the conflict with his position of running the auto company, or at least overseeing the running of an auto company. the president of the united states has said we do not want to run and not a company, so i say good on you, mr