Auto Czar tells Congress to back off auto dealership bill

The Obama administration's auto Czar told lawmakers not to be concerned over dealerships which were closed, that its purpose was only to help GM and Chrysler work through their recovery plans, though members of the House Judiciary Committee weren't buying into it.

(SyndicateMyNews) - President Obama cautioned Congress, warning them not to interfere with the closing of auto dealeships around the nation, saying it would interfere with GM and Chrysler's recovery plans. But lawmakers questioned the entire auto bailout plan and surprisingly, Democrats were amongst those Representatives voicing concern.

The word came down from White House auto ccar Ron Bloom who heads the Obama administration auto task force before a House Judiciary subcommittee Tuesday that a plan the House had approved to restore General Motors and Chrysler auto dealerships could risk taxpayer funds, calling the move a "dangerous precedent".

Bloom told the House Judiciary subcommittee, "These companies had far too many dealers relative to the number of cars they were selling."

Lawmakers objected to Bloom's comments, knowing they came from the Oval Office where Treasury Secretary Tim Geithner had already hammered out deals to nationalize the nation's leading domestic automotive manufacturers in a closed-door deal with Union leaders whose members had canvassed for Obama during the presidential race last fall.

While picking on Democrats, many Republicans objected to Bloom's insistence that autodealers be tossed to the way side, creating a bipartisan front against White House objections to Congress intervening.

While the Senate has yet to consider the House bill, Representatives had voted last week to restore 3000 dealerships which were closed. Both GM and Chrysler object to the plan, saying they were eliminated in order to restore profitability to dealerships overall, citing a loss of domestic market share as the underlying reason.

GM plans to cut 2000 dealerships from its 6000 franchises next year by simply not renewing the franchise. Chrysler cut 789 dealerships through the course of bankruptcy, leaving close to 2400 to continue selling Chrysler vehicles.

Texas lawmaker Lamar Smith (R) accused the White House of good ol-boy deals and political payback. "This administration is trying to bully businesses into government-run deals that benefit political allies," said Rep. Smith.

Rep. Dan Maffei of New York told Bloom the Obama administration never told taxpayers what the deal was going to be until it was too late for comment, biting his GOP lip to throw up the health care reform bill being crammed down taxpayers throats in the same manner.

"Congress and American people were left in the dark during the auto industry restructuring," said Rep. Maffei. "We don't want a bailout of the auto industry to become a wash out for the auto dealers."

Nationwide, autodealers have band together to lobby in support of the legislation, claiming 200,000 jobs are at stake. Yet Bloom said if passed by the Senate (assuming Obama would even sign such legislation), it would hurt GM and Chrysler's chances of obtaining private sector financing.