New York Auto Dealers Slam Decision to Reject Auto Bailout

• Greater New York Auto Dealers Association Disappointed in Senate's Decision to Reject Auto Bailout

• Millions of Jobs at Stake, President Must Act Quickly

NEW YORK - December 12, 2008: The Greater New York Automobile Dealers Association (GNYADA), an organization that represents 650 franchised new car dealerships in metro New York, is disappointed in the Senate's refusal to pass a rescue bill endorsed by President Bush and congressional Democrats, a move that could cost millions of jobs in America.

"This Association and the dealers it represents are extremely disappointed that the U.S. Senate did not act on this President-endorsed rescue plan," said GNYADA president, Mark Schienberg. "It's a shame to see lawmakers playing politics with peoples lives and jobs. We implore the President and Congress to act swiftly to prevent the U.S. auto industry from collapsing," Schienberg added.

Locally, dealers in the New York City area inject $23.4 billion into the area economy, generate $1.64 billion in revenue for the state and local governments and employ 62,077 (directly and indirectly).

Detroit's carmakers employ nearly a quarter-million workers, and more than 730,000 others produce materials and parts for cars. If one of the automakers declared bankruptcy, some estimate as many as 3 million U.S. jobs could be lost next year.

Dealers nationwide employ more than 1.1 million people. According to Bureau of Labor statistics 20,000 auto dealership jobs have already been lost this year. The National Automobile Dealers Association (NADA) is predicting that 900 dealerships will close this year.

Statement by White House Press Secretary Dana Perino and Endorsed by Greater New York Automobile Dealers Association
It is disappointing that while appropriate and effective legislation to assist and restructure troubled automakers received majority support in both houses, Congress nevertheless failed to pass final legislation. The approach in that legislation provided an opportunity to use funds already appropriated for automakers, and presented the best chance to avoid a disorderly bankruptcy while ensuring taxpayer funds go only to firms whose stakeholders were prepared to make the difficult decisions to become viable, competitive firms in the future.

Under normal economic conditions we would prefer that markets determine the ultimate fate of private firms. However, given the current weakened state of the U.S. economy, we will consider other options if necessary - including use of the TARP program -- to prevent a collapse of troubled automakers. A precipitous collapse of this industry would have a severe impact on our economy, and it would be irresponsible to further weaken and destabilize our economy at this time.

While the federal government may need to step in to prevent an immediate failure, the auto companies, their labor unions, and all other stakeholders must be prepared to make the meaningful concessions necessary to become viable.

Dealership Facts: Auto Industry Asking President to Act

900 dealerships are expected to close this year.
* Auto sales have plummeted 30-40% following the downturn in the economy and the credit crisis.

* Dealers employ 1.1 million people nationwide. Bankruptcy would force dealer closings, putting people out of work, increasing foreclosures, shuttering storefronts, idling real estate, and reducing state, county, and town tax revenues. Failure of an automaker would have a domino effect on dealers and suppliers.

* Bankruptcy would further threaten the availability of credit for dealers for consumer purchases and financing the inventory on their lots.

* Thousands of dealers own both domestic and foreign franchises. Bankruptcy of one manufacturer would have dire consequences for these dealers.

* Supplier companies would also be in jeopardy if an automaker went into Chapter 11. This would cause a major disruption in the supply chain for both domestic and foreign manufacturers. Bankruptcy of an automaker would further depress sales and consumer confidence.

* Bankruptcy of an automaker would destroy demand for that company's vehicles and put dealers out of business.

In a recent CNW survey, 80 percent of respondents said they would not purchase a vehicle from a bankrupt automaker.

* Consumers will avoid the brands of a bankrupt carmaker because they will worry about warranties or the availability of parts and service down the road. Our weakened economy cannot withstand an automaker failure.

* Analysts have found that bankruptcy in the auto industry would be "catastrophic" to the nation's economy.

* The damage to the economy from a bankruptcy restructuring would be much higher than bridge loans.

* The auto industry is experiencing a temporary, serious downturn, as evidenced by the lowest sales rate for new vehicles in over 25 years.

We are facing severe reductions in auto sales and dealers and their employees are suffering - a bankruptcy will just make matters worse.