Friday, 12 December, 2008 1:40 PM
Greater New York Auto Dealers
Association Disappointed in Senate's Decision to Reject Auto Bailout
of Jobs at Stake, President Must Act Quickly
car dealer in New York.
YORK -- 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.
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,"
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).
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.
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.
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.
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.
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
Facts: Auto Industry Asking President to Act
dealerships are expected to close this year.
sales have plummeted 30-40% following the downturn in the economy
and the credit crisis.
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
would further threaten the availability of credit for dealers
for consumer purchases and financing the inventory on their lots.
of dealers own both domestic and foreign franchises. Bankruptcy
of one manufacturer would have dire consequences for these dealers.
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
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
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.
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
Source: The Greater New York Automobile Dealers Association