Call for Moratorium on Auto Dealership Closures

New York, NY - (June 15, 2009): "The time has come for a moratorium on the forced closure of GM automobile dealerships while their true value to the industry and economy is thoroughly investigated," said Greater New York Automobile Dealers Association president Mark Schienberg.

"I implore the President's Automotive Task Force to halt this aspect of the restructuring of GM. A moratorium on dealership closures would not impact the other financial and structural changes that the automakers are being forced to make, but it would save thousands of small businesses and tens of thousands of jobs," said Schienberg.

"It is becoming increasingly clear to automotive analysts and other industry experts that closing dealerships is not the solution. I fundamentally believe that the arbitrary closing of dealerships will end up being the final nail in the domestic auto industry's coffin rather than its salvation," continued Schienberg.

"It's clear that vehicle sales came to a screeching halt at the end of last year when the banking crisis first hit and since then automobile dealers have used their own resources and entrepreneurial skills to stay open through the worst downturn in automobile sales in living memory only to have their dealerships shuttered arbitrarily by this reckless policy decision. It's crazy," continued Schienberg.

Dealers generate more than 90 percent of manufacturer revenue and are not a cost to the automaker. A rapid reduction in dealer numbers would not only do absolutely nothing to improve GM's viability in the short term, but it would actually work against their stated objective to increase revenue and cut costs.