mr. henderson and mr. press realize that. >> if i may? is this the document? >> yes. on page three we outlined the dealer performance score and the way teams are in their 50% sales come a 30% customer satisfaction on page three of the document. >> i thought this was a power point* presentation and i did not at the think that is it so this is the criteria? >> we will have copies made. >> mr. blankenbeckler since you have received your two leaders -- letters as anybody come to you and say we want to explain why we have done what we have done and we want to give you a chance to show us the error of our ways and if you wish to continue a business relationship this is what you need to do? >> no. they have not. >> mr. henderson and mr. press, do think it would be reasonable business practice to give dealers said in some cases have decades of relationships with the companies that you had some opportunity to know why they were evaluated the way they were and give them an opportunity to show why they may have been

mr. henderson? >> i don't have anything to add. >> gentlemen do believe your respective numbers of dealerships has been reduced for your restructuring plans and sfo has parity been achieved through these plants and a way which will be adequate with regard to our foreign transplant competitors? >> we tried to achieve a dealer network going forward to have a minimal impact on removing dealers there have been critics that say we did not go far enough, we did not want to go all the way to have parity but we are in a good position to go forward and have the dealer network emerge over time. but through the bankruptcy and emergence of a new company we have the optimum amount of dealers going forward 2391. >> and our case also as i mentioned we would expect 3600 dealers approximately even with a modest improvement next year and conservative assumptions we would almost double. >> very quickly, it is said the dealer should be permitted to remain open while you terminate to provide service and maintenance. wha

mr. henderson and mr. press, do think it would be reasonable business practice to give dealers said in some cases have decades of relationships with the companies that you had some opportunity to know why they were evaluated the way they were and give them an opportunity to show why they may have been evaluated unfairly? >> yes, sir. i would like to add that because of the fact our notification was coincidental with the bankruptcy action, a lawsuit was brought and the fact we could not have a lawyer in an active lawsuit in every discussion we were not in a position to do that until yesterday. year more than happy to have those discussions going forward now that the lawsuit has been finalized. >> mr. henderson? >> as of yesterday we received 856 request to reconsider our decision, we reversed 45 weeks elected to complete the review by today but given the number of requests we will plan to work through the weekend into monday to finish this and are willing to consider all quest for consideration. >> mr. blan

mr. henderson. given the fact bankruptcy is a brutal tool and in some cases it may be necessary, do you believe that entity in general motors and chrysler which resort to bankruptcy for the best of intentions i will stipulate that for the moment, should bend over backwards on the side of giving the benefit of the doubt to dealers that have been loyal, effective and largely profitable partners to the manufacturers know what? >> i can't speak with the bankruptcy court should or shouldn't do -- >> i'm not asking what they should do, i'm asking what the company should or shouldn't do. >> the reason we approached winding down agreements is to handle this responsibly as we could. >> the bottom line is the law probably allows you to do what you're doing and i have no doubt that you've probably made the decision you think is consistent with exercise of your responsibilities. you have got tough jobs. but we have got a unique situation here where the brutal on fairness of the law is imposing enormous and fran

mr. henderson this. the committee staff has received reports that some dealerships that have been chosen to go forward, in other words, not be closed, are being told that they should resign from positions of the national auto dealers association, an ada and from positions on state auto dealer associations because of nadh support of legislation to reinstate straight state franchise agreements as the hr 2473. soap rdw mr. henderson or mr. press aware of any cause made on behalf of gm or chrysler to tell people not to be on these boards, state boards? >> mr. chairman, i'm not aware of any bills. >> not only am i not aware of them, if anybody in my company is doing i would like to reprimand them or perhaps let them go. >> , will you commit, mr. press and mr. henderson, will you commit to sending out a letter, a correspondent, a message to your employees of your company's that such intimidation would not be tolerated? >> we had a caulfield conference call with all of our field organization prior to starting t

mr. henderson or mr. press aware of any cause made on behalf of gm or chrysler to tell people not to be on these boards, state boards? >> mr. chairman, i'm not aware of any bills. >> not only am i not aware of them, if anybody in my company is doing i would like to reprimand them or perhaps let them go. >> , will you commit, mr. press and mr. henderson, will you commit to sending out a letter, a correspondent, a message to yo have information i would -- >> here's the e-mail from one of the. >> if you have such an e-mail, why don't you give it to one of the members so they can ask more specifically on the. mr. henderson. >> mr. chairman, i will put that in writing. >> so i take mr. press and mr. henderson you will put that in writing for us. thanks. let me ask this. you said under a review and fortify dealers have that decision reversed. so you didn't have an appeal process until you testified before the senate, right? >> no, sir. we had planned to have an appeal process. >> does dealers that were close wh

mr. henderson? >> i don't have anything to add. >> gentlemen do believe your respective numbers of dealerships has been reduced for your restructuring plans and sfo has parity been achieved through these plants and a way which will be adequate with regard to our foreign transplant competitors? >> we tried to achieve a dealer network going forward to have a minimal impact on removing dealers there have been critics that say we did not go far enough, we did not want to go all the way to have parity but we are in a good position to go forward and have the dealer network emerge over time. but through the bankruptcy and we have the optimum number of dealers going forward. >> in our case, we would expect 3600 dealers would have the throughput almost doubled. >> it has been said that the dealer said be allowed to remain open while you are terminating service and support. what is wrong with that arrangement? >> there are existing dealers that surround them that are taking the franchise. the dodge-jeep deale

mr. henderson and mr. press and others coming some distance. i know that you've raised your hand and that because the rules of the ray hearing i couldn't recognize you so if there's something you want to add we will go right on the line and if anybody wants to add something that we will wrap this up. we are going to keep it somewhat brief. >> im just perplexed when mr. press last week said in the case of dealers not being taken forward last year they lost 55,000 units of sales, i -- the number is important to them apparently. but then like i say, they are going to lose 140,000 units in sales when the steelers are removed. i know that he says they can only produce 700,000 cars but there has to be a plan in place for growth the market improves. i'm sure it can build another 140,000 cars. that's why i am perplexed on that so i thought i would throw that in. >> thank you for coming. mr. spitzer, anything? >> [inaudible] [inaudible] >> mr. press? >> i appreciate the opportunity to communicate with the kennedy and provide this information. it's been

mr. henderson and mr. press, in response to, i think it was senator johanns question about economic analysis, mr. hendern, did you say you did not perform any economic analysis on dealer by dealer in making these decisions? did either of you perform an economic analysis using specific criteria by cwhich you made thee decisions in targeting these dealers. >> the criteria was sales effectiveness so the dealers that were notified for wind down have been consistently underperforming in terms of sales effectiveness. we have had made mistakes, however. and second, customer satisfaction has been below average by a significant degree for a significant period of time. >> that's contrary to some of the dealers i've heard from in terms of where they ranked. i said it once specifically, so where it is truly puzzling given the fact in the state of maine, just so you understand, more than 50% of the registered vehicles are either gm or chrysler. and yet we're going to have some of the largest counties in maine without a

mr. henderson and mr. presser testimony about what could make a dealer profitable, using cars or parts or service saying or other things. i will start with mr. henderson, if a dealer is profitable, and buying cars from the manufacturer what it is selling, what does it matter if the profit center is derived from new cars or sales center or parts? >> good question the. >> thank you. >> in the case of the dealers who were impacted in the wind down situation 60% were not profitable. >> my question is if a dealership is profitable then it why should you care what center? very quickly. >> we look at overall profitability not individual centers. >> right. but if a dealer is profitable from whatever source and buying cars from gm, why would you care? if it is profitable then why not let it stay in business? >> we don't care if it is from parts. >> so why would you close a dealership like that? >> not all cases were profitable. >> customer satisfaction. >> now it is customer satisfaction? >> multiple criteria. >> m

mr. henderson and mr. press, your corporations were built on the backs of people like the dealers use the in this room who went out there, invested in their communities and made to profitable during your boom time. and now i think each of you and your company is owed them and the taxpayers of this country a detailed explanation for your business decisions because we have to live with the aftermath. and i welcome every once testimony on the committee and the board to further opportunities to question the witness. >> thanks, mr. braley. miss degette for opening statement, please. >> thank you very much mr. chairman. in following up on what mr. braley and mr. barton said, these bankruptcies and is closing of the local car dealerships are not just affecting the dealers em

mr. henderson and mr. press, in response to, i think it was senator johanns question about economic analysis, mr. henderson, did you say you did not perform any economic analysis on dealer by dealer in making these decisions? did either of you perform an economic analysis using specific criteria by cwhich you made thee decisions in targeting these dealers. >> the criteria was sales effectiveness so the dealers that were notified for wind down have been consistently underperforming in terms of sales effectiveness. we have

mr. henderson.hn mceleney of national auto dealers association. >> [inaudible] [inaudible] [inaudible] the jim of dealers throughout this ordeal. in the initial viability submissions chrysler mention nothing other than continuing our current program to facilitate dealer consolidation. yet bankruptcy has less on hundred 89 chrysler dealerships without franchisees on 26 days' notice without even buying back their vehicles, cars and factories specific tools. it no manufacturer has ever done this. gm original liability submissions reflected desire to eliminate some brands in his call for additional dealer consolidation over an extended time. now besides the brand eliminations, 1350 additional gm dealers face terminations on a much more aggressive time line. why this dramatic shift? in response to a question before the senate banking committee on june 10th, ron bloom of the auto task force said and i quote, we did not give the companies in the miracle targets but we certainly did say regarding plants and

mr. henderson, in response to that? >> the same. >> thank you, mr. chairman. >> mr. chairman, i know it is not my prerogative to ask the questions, but there is a question that came up earlier about the go forward agreement that i addressed in my testimony that i don't think we had an opportunity to explain or defend that agreement that 4,000 dealers will be obligated to going forward, if i may ask. i guess i just did, sorry. >> i'm happy to answer the question, mr. chairman, if you'd like. the answer is we distributed that agreement this week. we have a meeting set up with the nada friday where we intend to discuss with them the most objection aable or parts of the agreement that they have the greatest objections to and we're confident we will find a resolution to that. that meeting is friday. we tried to pull it forward and we'll make judgments and decisions quickly, try to address the legitimate concerns in this case of the dealers. thank you. >> thank you very much. senator snowe, senator brownback. >> thank you, mr. chairman. i hope people watching this see the

mr. henderson claimed in a tv interview that there were economic rational and no one's aware of it. how they were determined. so what exactly silent rational for shutting a dealership like the one in maine i had a conversation with a dealership heartbreaking conversation. had one of the most thoroughly trained workforces, highest customer service index in the state and according to general motors they could no longer maintain a productive business relationship. why? this is a business that's been in partnership with general motors for 80 years. third-generation. and g.m. asked this dealer to pack up and relocate and now they are targeted for closure. due in part to that relocation. this is a dealership that has served an area of more than 100,000 people sold more than 2 million in parts and confidently several popular here's the in the entire county will go from multiple g.m. dealerships to absolutely none leaving geographic areas without any dealers, without customers having to rely on providing, getting the service that they depend upon, having to drive 100 miles or mohr for servi

mr. henderson, it has got to be uncomfortable for you have to come here. it is uncomfortable honestly for me to have you here, because it means that we're doing something that is outside the realm of what we know about. i don't think anybody here has any particular -- with some exception, any particular expertise in the car business. i certainly don't profess to. and -- but you find yourself now with a board of directors essentially, 535 members, and you have to be subjected to all of these questions which i'm certain you feel are micromanaging your business. but we are now partners and as partners, these are the types of questions that you get to answer. and i appreciate, mr. press, you sharing with me a little bit about what your intentions are with respect to my state of south dakota. you had indicated that there are seven dealerships in my state of south dakota, and i might add, too, just for point of reference, in a small state, like mine, and a lot of small communities, the car dealership really is the center of gravity for the entire community. it i

mr. henderson and mr. press, your corporations were built on the backs of people like the dealers use the in this room who went out there, invested@@@@@@@ affecting the dealers themselves, but millions of people who live in all of our districts who are going to be inconvenienced at the very least. .. because on the one hand, we see these profitable dealerships in our districts. on the other hand, we see the need for consolidation and for saving money but we don't quite understand how closing those profitable dealerships works escially given the human implications and that's why we're concerned and that's why we're having this hearing. i think that our constituents deserve an explanation. i want to mention one other thing really briefly that's not the subject of this hearing, mr. chairman, but it might be worth some further investigation. as part of the administration's bankruptcy plans, they are putting all of the product liability court claims into the bankruptcy court, which is going to wipe out the clai

mr. henderson from general motors, we're honored to have you here today as well. we have hard questions and i appreciate your willingness to come here today and explain your situation, your perspective with clear and straight answers. since american taxpayers on sister% of general motors we have a right to know just how the decisions affecting our constituents are made. we have a duty to make this process more accountable and trans parents were all concerned. so let's start with a look at the customer service. mr. henderson, you spend pretty large sum of money on newspaper ads recently and i'm sure you're familiar with their own ads proclaiming concern for greater transparency and customer service. yet you have dictated the closure of gm dealerships across organic and the country and it was specific in burns, organophosphate appear if you are a gm customer and the dealership in burns, oregon is closed, your nearest gm dealer is idaho 136 miles away. that is the equivalent of driving from philadelphia to washington d.c. to get service for your general motors vehicl

mr. henderson, how many minority dealerships will be out of business because of your action?>> of our 230 minority dealers, we're in the brands that will go forward with us, 44 will be affected by this action or 19%, which is less than the average, sir. >> okay. you talk about the auto task force putting pressure on you to close more dealerships, the report on march 30th criticized you for not being aggressive enough. did you have a plan or a notion prior to march 30th as to how many dealerships general motors would close? >> two things changed, sir. one is we actually accelerated our brand rationalization so, for example, we dropped the pontiac brand which brought forward a series of actions that we otherwise would have taken later, number one. number two, our plan called for us arriving at about the same level of dealers in the end of our business plan period which was 2014 and the view was that was too lock, you needed to move faster on this which we did and so we will arrive at roughly the level that was in our original plan of 2014 by 2010. >> you've aggressively acceler

mr. henderson have claimed in an interview there was economic rationale for these actions.ted neither the wind house is aware of the economic rationale behind the closings of precisely how they would determine so what is the rationale for shunning a dealership like in maine. i had a conversation with a dealer, heartbreaking story and conversation and of most poorly trained workforce is, high as customer service index in the state and according to a letter from. >> and alondra maintain a productive business relationship. why? this is a business that has been in partnership with general motors for 80 years, third-generation and gm asked this dealer to pack upç and relocate and now they are targeted foreclosure. due in part to that relocation. this is a dealership that serves an area of more than 1,000 people and $2 million and confidentially deals in several populous area as an entire counties will go from multiple gm dealerships to absolutely none. leaming geographical areas without anyhnealers and customers time to rely on providing getting the service they depend upon hav

mr. henderson, mr. fritz henderson, who is the chief executive officer of general motors. >> good afternoon, mr. chairman, senator hutchison. i welcome this opportunity to testify today. it's our obligation to be open and transparent in all we do to reinvent general motors, particularly with the american taxpayer as our single largest investor. before i explain why and how we go about restructuring and consolidating our dealer network, i want to talk about the human story behind our plants. our actions have forever changed the lives of people, families and whole communities. for our dealers, they are valued partners, friends and the face of gm to our customers. personally and professionally, i feel strong, deep ties to dealers. i personally have worked at dealerships in my summer in college. my father, 39 years calling on buick dealers. my brother, 25 years. it's in my family. through my career and over my career i visited dealers in 48 countries around the world, including the united states. i have walk

mr. henderson. mr. henderson, just in terms of how you got to this list of dealers survive, this list of dealers don't, how did you get to that list? did you form a committee at general motors or something like that? >> we went back and looked at history, senator, of both sales effectiveness as well as customer service and a series of other matrix as well but those two would be the most important in terms of evaluating it, not just simply one year but going back multiple years. >> who headed that up at general motors? give me a name. >> his name was ben marklinave. >> what relationship did you have then with the auto task force, the administration, as you were working your way through this process? >> the auto task force was not involved in the process at all. >> were they made aware of your process or did you surprise them like you surprised the dealers? >> they were aware of the process but they were not involved in it. no. >> did they ever see any of the documents that were produced? >> we have not sh

mr. fritz henderson, chief executive officer of general motors corporation. mr. braley, you want to introduce john? >> i'm pleased to have john who's president of the auto dealers president in clinton, iowa, in my district and also has another franchise in iowa city, welcome, john. >> mr. spitzer -- betty help me out elyiri a. >> he has been in the business a long time in eylira and the surrounding years. 100 years i believe in the auto dealership. [inaudible] >> well, those are pretty deep roots and i am honored and i'm grateful, mr. chairman, that you brought mr. spitzer to share his experience not only in obviously providing our communities with the cars they need to drive but helping to shore up so much within our community by sponsoring organizations and contributing to the quality of life there. >> next we have mr. bob thomas, mr. walden, would you like to say a few words there. >> thank you very much, mr. chairman. mr. thomas is a constituent of mine from bend, oregon. his grandfather formed the dealership for general motors in 1918. he served as lieutenan

mr. frank put in a call to the g.m. chief executive officer, fritz henderson, and lo and behold the facility has a new lease on life according to "the wall street journal." mr. frank, of course, is chairman of the house committee that recently orchestrated paying $62 billion in taxpayer money to give the u.s. treasury 60% ownership of general motors and 8% ownership of chrysler. now for the second car czar award, there are many deserving contenders. for example, this afternoon my distinguished colleague, the honorable chris dodd, mr. frank's senate counterpart, is chairing a banking committee hearing featuring two of the administration's chief meddlers in washington-owned auto companies. one is mr. ron bloom, a senior advisor on the auto industry at treasury. the other is mr. ed montgomery, white house director of recovery for auto communities and workers. and tomorrow over in the house of representatives, the financial services committee will hold a hearing on salaries of workers in companies the government owns. another obvious contender for the car czar award today is the administration's new chief price fixer for the cos

mr. henderson and mr. press, g.m. and chrysler respectively, would be made a part of the "congressional record" along with my statement. the presiding officer: without objection, so ordered. mrs. hutchison: thank you, mr. president. and i yield the floor. a senator: mr. president? the presiding officer: the senator from new mexico. mr. binge map ding man: mr. bingaman: mr. president, twice in the last two weeks i have requested unanimous consent to consider calendar number 97, and i'd like to do that again that the time. we've advised the republican side of the aisle that i will be doing that, so i will proceed with that at this point. mr. president, i ask unanimous consent -- mrs. hutchison: mr. president? excuse me. mr. bingaman: mr. president, i ask unanimous consent that the senate proceed to executive session to consider calendar number 97, the nomination of hillary chandler tompkins to be the solicitor of the department of interior, that the nomination be confirmed, that the motion to reconsider be laid on the t