WASHINGTON -- The Obama administration should ask General Motors to suspend the 500 dealership terminations it plans Oct. 31 until a federal investigation of dealer cuts is completed, a U.S. congressman said.
Rep. Steven LaTourette, R-Ohio, said the investigative findings of the Special Inspector General for the U.S. Troubled Asset Relief Program could come too late for the GM dealerships scheduled to be closed.
The inspector general's office, headed by former federal prosecutor Neil Barofsky, has not said when it would complete its investigation of dealer cuts by the administration, GM and Chrysler.
“It's like someone's in prison and the DNA that would prove his innocence is hidden,” LaTourette said in a phone interview today. “Once a dealer is shut down, it's difficult if not impossible for him to get back on his feet.”
LaTourette's advocacy for auto dealers has proven effective in the House. Last year he introduced a bill to reverse more than 2,000 dealer terminations during GM's and Chrysler's bankruptcies.
LaTourette's bill passed the House but stalled in the Senate. It was a precursor to the dealer-arbitration bill that eventually became law in December.
He said he plans to join with Cleveland-area dealers soon to call formally for administration action. The U.S. Treasury's ownership of 61 percent of GM enables it to secure the automaker's cooperation, the lawmaker said.
GM spokesman Greg Martin declined comment. Treasury spokesmen did not respond to requests for comment.
About 500 GM dealerships that were tagged for termination last year will see their sales and service agreements expire Oct. 31, GM spokeswoman Ryndee Carney said.
These dealerships will not be allowed to sell new GM vehicles or perform warranty service, she said.
There were 5,023 active GM dealerships as of Sept. 30, Carney said