mr. press, president of chrysler, urged dealers to buy 15,000 cars from the company in order to save it. now let me read what mr. press reportedly said to the dealers. quote, you have two choices: you can either helpless or per noss down. mr. golick, are you familiar with this? >> very familiar. >> the article also quotes mr. press saying and i quote, if you decide not to do that, we've got a good memory of who helped us and who didn't. do you recall that, mr. golick? >> i very much do. >> how did you feel about that? did you take that as a threat? >> i never heard that from an auto executive in my life. i've never heard anything like that. >> mr. golick, as the result did you buy additional cars? >> you know what, i honestly can't remember. i think if i had to look it up and probably did not on that particular month but i did all the other months. i think chrysler could provide you with that, but i have a feeling i did not that particular month he made that comment as i sloughed off and told m

mr. press may sit sound like sunshine and lollipops. you're exact word was invoice we're selling them mop at invoice negative o back ashley ppa minuses of 350 we are selling cars 1500 below invoice on average. we normally sell to the public as and voice or right around there. we are selling them up 1500 less than we normally do to the other dealers. >> parts inventory? >> mine has not been addressed yet. i don't know. i am still in a state of shock. >> i was told when chrysler came to see me yesterday i was told they took care of all of their dealers they are closing and inventories and cars and parts inventory of would be purchased. >> what needs to be understood, there is no written procedure how we will be paid. thank god i only have two new cars left but some have half a million dollars worth. we hear the cars will be trucked away and we will wait for the money some hopper i have not seen anything on paper obery will be paid. that is an important aspect. is there a written procedure? >> fir

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 when the

henderson or mr. pressaware 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 this, and that was exactly the instructions that was given to them, to make sure that this was done in a very positive manner to stack my question was a witch put that in writing and senator everybody? >> absolutely. i would like to know if anybody in our company did that if you 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

i would like to ask mr. press and mr. henderson send, but is there an established set of criteria under the evaluation which dealerships were to be closed and which were to be left open? you have actual criteria in writing how you evaluated dealerships foreclosure or to remain open? >> yes. we do and resubmitted those last night. >> yes we do. >> does the dealers know of these criteria? >> and our case, they were not notified of the criteria prior to the notification. >> mr. henderson and? >> in our case we have identified the criteria the -- criteria but the dealers and not necessarily know what the criteria are the two most important our sales effective and customer satisfaction. >> you submitted them last night? twenty-two? >> the staff of this committee. we can resubmit them. >> we don't have them. >> we can get them to use to make the point* is you're under oath and i don't want people to think we're holding something back. we don't have been a criteria agreements. >> we have just established one of the puzzles, if i

. >> thank you, mr. press. did the dealers know of these criteria? >> in our case, they were not alerted about the criteria prior to the notification. >> what about you mr. henderson. >> in our case we have identified the criteria and have weighted that. the dealers don't necessarily know about the weighting of the criteria. some of which are sales and customer satisfaction. it was given to who? >> to the staff of this committee. committee. we can resubmit them. >> we don't have them. >> we can get them to use to make the point* is you're under oath and i don't want people to think we're holding something back. we don't have been a criteria agreements. >> we have just established one of the puzzles, if it is somewhat unfair to mr. blankenbeckler and mr. thomas and the other dealers to be told their dealerships will be revoked and get to they did not have any prior knowledge of the analysis and criteria that were being used and apparently to this day don't have the knowledge. mr. blankenbeckler is that a fair way to run a railroad? >> no. >> mr. thomas

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 evalua

mr. chairman. press about the appeal process and i talked up the state law and under the state laws about the country it is my & and that you can terminate for just cause you can terminate dealerships. is that your understanding, mr. henderson? mr. press wasn't certain. >> i have the same recollection. there are provisions but they depend bistate but yes in general for cost. >> when you say they depend or maybe differences but they all have some sort of just cause standard; is that correct? >> i can't answer the question. >> i can tell you in ohio there is a law that allows termination based on just cause so we can go with that understanding. let me ask you how many dealerships did gm closed last year based on a just cause under the state laws? >> i will have to get back to you i don't have an answer. >> do you have any idea? >> no >> and how many are easily did to close during the bankruptcy? >> as we talked about, we will move from approximately 6,000 to approximately 3600 overtime. >> okay. 2600, is t

. >> mr. press, but mr. henderson, mr. mceleney has indicated the franchisees do not cost manufacturers money to maintain. do agree with this question and agree with his position or do not? >> i do not. >> i do not. >> why? >> and our situation, one of the main reason is that caused our bankruptcy and a week product engineering is a requirement that we provide individual models for each standalone franchise, the sister models that cost substantial amount of money and took resources which in negative sales that is a huge cost. the sec and of course, is lost sales, lost volume in a market underperforming, those sales don't provide revenue for us. they lose that and it was 1.5 billion dollars, the development of individual models is 1.4 billion. that is a very real situation. third, because we have so many dealers and the average dealer of loses money, we don't have a competitive dealer network that can compete with other manufacturers with customer satisfaction, location, of facilities, advertising, a substantial cost to the

i want to ask, if i could, particularly, mr. press and mr. henderson, i had the dealers again in my state and where i bought my town and country chrysler minivan, he says, look, we don't cost these guys a penny. i don't cost these guys a dime. yet obviously you have enumerated some costs that i think in mr. johanns' case, you were saying this is what they are. why not go bankruptcy a different route on this. instead of cutting free the dealerships, why not say to your lower performing ones that you articulated and found them, we can't afford to subsidize t support you. so therefore we are not going to provide the network of money and backing to you that we're going to provide to a higher performing category, so that you're not just cutting them free on this, because you had two guys over here saying, that, looks like they're good salesman to me, frankly. >> they don't subsidize us. >> they are saying they got costs associated with this large dealer network. and you guys are saying they're not a penny associated with us. why not then bifurcate

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 any dea

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

how many, mr. press how many minority dealers are going to be put out of business by your action here? >> the minority dealer reduction is exactly the same of the total dealer body reduction. the share of dealers that are minority dealers increases a small amount. >> not from the in share. raw numbers. tell me how many are going to be out of business. >> 38. >> 38. 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 pont

i, mr. press, unless the automotive news is some, you know, agent of the kgb or something, they did report that in january of this year, in a conference call with your dealers, you said you have two choices. that's been pointed out. you can either help us or burn us all down. why? how? get 78,000, buy 78,000 cars, chrysler. by 78,000, in one month, to help the company. but many of them felt coerced to buy cars that they didn't need because they knew chrysler was considering cutting additional dealers. in other words, there is a whole question of was there any ethical consideration on your part? you knew exactly what you were doing. january is different from june 12th but now it is all very clear as mr. wattly just exactly what you were planning back then. and it strikes me that you have not been forthcoming. you know, mr. lopez can't possibly absorb that. so now you're forcing the terminator dealerships to sell those vehicles in 26 days, which is six more days. you say that you made a lot of progr

. >> mr. press, were you an auto dealer like mr. lopez, would you know how to close down a dealership in 26 days? can you tell me how you do it? >> well, we are nae the process of working through a bankruptcy of chrysler corporation and not too many more days. it's very difficult, it's strenuous. the fact of the matter is that in our situation, we did not plan or have in our minds the desire to have a bankruptcy. >> i wish you would answer my question. >> okay. >> would you know how to do it? could you do it in 26 days if you had to? >> i would have to find a way to do it, yes, sir, i would. i would have to find a way to achieve the shut-down required within that time period as we are being required within our time period that's given to us. yes. >> mr. lopez, on january 9th, i think it was, of 2009, that being this year, mr. press, according to all reports, including newspapers, within the business, did indicate what you said. that is, got a lot of people on the telephone, said you got to buy 78,000 cars. >> absolutely. >> to keep

henderson. >> that is, correct. >> mr. press, i'd guess you have no problems to make that is, correct. >> was continue with three opening statements, i will hold you to a pretty firm. next on the list would be mr. braley. >> thank you mr. chairman and ranking member walden. i thank you can tell from the interest in this hearing that is something that affects all for under 35 congressional districts and that is why i am going to segment by written statement and focus instead on the human cost of what we're here to talk about as ranking member barton was talking about. i am very fortunate one of my constituents who is the chairman of the national auto dealers association from clinton, iowa is here because he works and sells cars in the heartland and i think a lot of what we're talking about today is an explanation of how the decisions that are being made are affecting dealers over the country. my wife's grandfather was at first ford dealer in dubuque, iowa and my uncle came home from world war ii and at the request of one of his n

mr. james press who's president of chrysler, llc. 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 grandfath

mr. press i would submit the cost producer will go up after the dealers are terminated because first of all, may be 40% or so get no representation at all part of it is electronically. there is no personnel. i will also submit they will cut very few field of people with you were dealers those fixed cost will go up. the other comment is the sales responsibility just too quickly educate the committee, they take the state average penetration for their brand and they expect every dealer to hit state average penetration in black of the problem is just to take an exaggerated, and not exaggerated by an example of how that can be skewed to an unfair management it has been found in ohio and through expert testimony they have thrown out many cases as a criteria, one of the terminated rejected stores in the congresswoman district, there is a dodge dealership in the middle of four country. two ford plants one was shattered but still a lot of residual buyers and living there, retirees and a planned still

>> [inaudible] [inaudible] >> mr. press? >> i appreciate the opportunity to communicate with the kennedy and provide this information. it's been a good learning experience. this will be good communication going forward. i don't know if i am looking forward to the performance review when i come back but i guess this would be the form to do that. .. >> thank you, mr. chairman. i appreciate the opportunity to be here on behalf of 19,000 car dealers in the country. in this difficult moment, we now difficult the economy is. if a dealer is able to keep his door opened, make the payroll, keep his customers coming in, i know there are other elements that play into it, but that is important to remember once we look at this. >> thank you for giving me the opportunity today. >> thanks for letting me come. i think i had a story, and i think everybody here today has the story. it is not have the time. thank you very much for listening to me. >> i would close with a rhetorical question, and that would be, with all these closings, will oth

mr. james press who's president of chrysler, mr. fritz henderson who's chief executive officer of the general motors corporation, mr. john mccelaney, and mr. russell aubrey watley iii, owner dealer, russell watley motor company. and i'm going to do a little switch here. i would like to start by calling on the two auto dealers. and i think they will help us set a tone and it will be helpful to all concerned. so mr. lopez, if you would be willing, sir, we call on you for your comments. try to hold them to five minutes. >> we want toities cuss how dealerships by gm and chrysler are drastically hurting small businesses. my name is pete lopez, from censer, west virginia. a small rural town of approximately 3,800 people about an hour out of charleston, west virginia. i'm the owner of spencer auto gl group, which is made up of two dealerships on main street america. chrysler, jeep, dodge, plus chevrolet and buick dealerships. we stfs six county areas in west virginia, and i am the face of chrysler and general motors to my community and my

i look forward to asking mr. press how he reconciles this decision to close the, dodge spirit as i mentioned, i want to see gm and chrysler return to strong and private companies. i am however, concern that the time frame for dealership closers in the way in which dealers have been treated it may actually damage the brands more than help them. i am also deeply concerned the closures will hurt rural communities disproportionately. in my pastoral number mission -- michigan district if a dealer closes down and can be a two hour drive to reach the next closest dealer and this will cause added expense and hardship for my constituents who need to have worn to work for a special service done and is certified dealership. in addition, when it comes to time to purchase a new vehicle many of my constituents will abandon gm or chrysler and go to whichever brand is locally sold by people they trust within our communities rather then traveling a long distance to future impersonal big box dealerships with a tone of the sales or the s

. >> mr. press, we got the new chrysler and old chrysler, will the new chrysler dealers required to sell fiats? >> with a required to sell fiats? we haven't established a brand position and product plan afford from now or alliance we will be branding fiats or some other brand. >> was it one of fiats considerations for helping out here with the new chrysler to get their product line in the united states? >> part of the new company is definitely going to benefit for the $10 billion worth of resources and product of a limit and hardware from fiats that gives tremendous car in trees and technology that would bring in our product line. >> are you required to sell fiats is line asking. >> we are going to have cars that have fiats technology or engines. >> but a car that says fiat? >> we haven't yet determined what brands and names will be on the vehicle. a vehicle could have a fiat name and it may have a chrysler name. >> mr. barton said, just for laughs, he said i help chrysler and general motors review

is been about 10 days since we had the debate on the floor and we have the assurances, mr. pressntacted with dealers who are being closed. i want to set the stage because it was just the week before last that i was contacted by some of the dealers in my state who were affected and in the received a letter from chrysler dated may 13th of 2009 saying that the agreement would be rejected with the steelers. as of june 9thç. and that meant about three weeks' notice and here was the attachment to the letter -- as a result of his recent bankruptcy filing chrysler is unable to repurchase or new vehicle inventory. as a result of his recent bankruptcy filing, chrysler is unable to repurchase your parts inventory. as a result of the recent bankruptcy filing, chrysler is unable to repurchase your essential special tools. so many of the dealers, who have been in operation and have had the burden of paying the taxes, hiring employees, doing business in a community and being an employer that is providing a part of the economy of this great country were notified after years of service that they

one is mr. press, miami tammy amy jeep dodge. he told me his dealership was perhaps the top seller in the south florida area and top in the country seems like the kind of dealership you would want to see continueed the other is in central florida holler chevrolet. i've grown up in central florida, holler is synonymous with chevrolet in the central florida region until bill hurt chevrolet ceased to exist, they were number two. presumed now since they are no longer around they would be the number one dealer in the central florida region how in the world does it make sense for a dealership like that to also be on the the list for close yures and in addition to the top seller they also have excellent customer service they know how to do this business, they've been in it all their lives so the specifics of this is what rhyme or reason is it because of this? because it is people's lifely hoods and businesses so we need to understand that this so we can understand these questions. i think they deserve to understand the rational why a de

mr. pressou are quoted in appealing to your dealers to make 15,000 additional purchases of price our products in orbit to save the company in new said the falling -- you have two choices, you can either help us or burn us down. think of it this way, we are a bucket brigade to our in-house under present positions are filled and we don't tell the other 30 we're going to burn down. if you decide not toç do that we've got a good memory of who helped us and who didn't. i think that recognizes the fact that the dealers are your assets and you depend on them and so many of them are being closed and for general motors i have not seen the list mr. henderson and i appreciate the times in my office on the way, but in the phone calls i have had in the last three days it appears what senator dorgan refer to distract the there's a disproportionate closure of a world dealerships and is the way it appears the main so i think the question of are they disproportionately close general areas and never to what is

. >> thank you, mr. press. mr. henderson, your opening statement. >> thank you chairman stupak and ranking member, walden. >> teeone to move that closer. >> on each action out to reinvent gm there is a human story, our dealers and parts of the larger gm family. there are valued business partners and for many consumers the face of general motors. however, the sacrifices all painful that we're all making are necessary to put gm in a better path to long-term viability and success and we owe this to the u.s. taxpayer. in essence this is our last chance to reduce debt, to operate under competitive labor agreements, to have the manufacturing capacity that matches realities 10 and partly to continue to design and build trucks with the leading technology. we simply cannot undergo the sweeping transformation without a comparable effort to reshape its retail network, one which was largely created in the '50s and '60s. we have been called upon to make tough commercial decisions and will do so responsibly and compassionately.

and so i look forward today to hearing from mr. press about the progress on that. and i look forward to hearing from the dealers about whether they believe that they have had that kind of outreach from chrysler. in addition, just this week, general motors has begun its process saying that it would close up to 40% of its dealerships, which would be approximately 2300, give or take, of the dealerships in this country following on 789 dealerships from chrysler. now just to put this in per spesketive, these families from these dealers who have made such an investment and who have taken really the financial burden for these dealerships, they buy the inventory. they take the financial risk, it's a huge burden for those who have stood and those around the country. but we're also talking about 40,000 employees of these dealerships. so we're talking about 40,000 families besides the dealers themselves, and we're talking about communities, so -- because i remember selling ads for the high school football program in my hometown, and who was the first person to buy that high s

we pressed mr. lardy at aig for makarov on just how the negotiations went, why did they pay 100%, his comment was he was the wrong person to talk to and in fact the fed had all of those documents and paperwork because they had struck the deal. so, my question to you is why was 100% paid on these obligations including what was the rationale, why weren't the interest of the public money interests protected so that there was a bitter negotiation than just forking over 100%. >> i don't see what basis does than 100% could be paid. there were obligations, failure to pay would allow the creditors to force bankruptcy which is exactly what we were trying to avoid. this is precisely why we need a regime that would allow the reza olver to hair cut creditors and abrogate existing contracts but under the current lull you can't avoid bankruptcy without paying off existing contracts. >> the people that were running aig said they thought they were certainly issues involved and they didn't owe the money under the co

when we pressed mr. liddy from a.i.g. for background on those, why it is they paid 100%, his comment was that he was the wrong person to talk to, that in fact the fed had all those documents because they struck the deal. so my question to you is: why was 100% paid on these various obligations, including the ones to bank of america, and what was the rationale there? why weren't the public machine interests protected so there was a better negotiation than just forking over 100%? >> i don't see on what basis the less than 100% could have been fade. they were contractual obligations, failure to pay would have allowed creditors to force bankruptcy which is just what we were trying to avoid. this is why we need a resolution regime which would allow the resolver to abrogate existing contracts but under current law you can't avoid bankruptcy without paying off the existing contractors. >> the people that were running a.i.g. said they thought that there were certainly issues involved in that, that they didn't owe the money under t

remember when she was in the white house, you know, eleanor roosevelt had press conferences so when harry became president they said is mrs. truman going to have press conferences and i think his answer was, i need to get back to you, which is smart. he wasn't going to answer for bess. they had to run this by bess first. she didn't want to have press conferences. she finally submitted to written questions and all the answers were yes or no. [laughter] >> she just didn't -- she just didn't take -- just didn't take to the -- you know, being in public the way harry did. so, yeah, but she loved her hats. >> when president truman left office, he was not the most popular of presidents. my question is, on this trip did he run into any animosity or any people shaking fists or anything of that nature? >> honestly, i did not find -- i can't believe it didn't happen but i didn't find a recorded incident of that. and you're absolutely right. his approval rating was about 22% when he left office in early 1953. which is just about where george w. bush's was when he left office in january of 2009. it's interesting that george w. bush ha

that would be real action as versus a press event. mr. president, i yield the floor, and appreciate the courtesy of the senator from no mr. leahy: madam president, for the sake of my colleagues, i want to talk about the time of the hearing of the sonia sotomayor nomination. i talked with the distinguished ranking member last week on this -- on this schedule and i would note the concerns he had raised. but i'm announcing today that the senate judiciary committee will hold the confirmation hearing on the nomination of judge sonia sotomayor to be associate justice of the united states supreme court on july 13th. that's a reasonable schedule. it will be the middle of next month. it's in line with past experience. it's going to allow several more weeks for committee members to prepare for the hearing. several more weeks that if i held the hearing this month, and there's no reason to unduly delay consideration of this well-qualified nominee. and she deserves the opportunity to go before the public and speak of her record especially if some have

i know there was a press conference party where mr. obama made a joke about how most people voted for him. usually in humor there's some truth. i've found that through my personal life other places. and also you say the press coverage was largely about sara palin. that was pretty short lived before they started attacking her. and i know brian williams even asked her for her medical records. and i don't think mr. obama's medical records, educational records, birth certificate, et cetera. there are a lot of things missing that we haven't seen. and then my third point here and i guess my question is in the press conference, there was no question about the committy and the playing. i mean, it was supposed to be for publicity. for who? what was it for? >> are you talking about air force one in new york? >> i am. >> which goes to theer issue of biggest mistake thus far. can you point to anything small or big that -- guest: in the presidency so far host: campaign or presidency. guest: i think the tom daschle situation, let's not say that the p

that would be real action as versus a press event. mr. president, i yield the floor, and appreciate the courtesy of the senator from north carolina. a senator: mr. president? the presiding officer: the senator from north carolina. mr. burr: mr. president, i ask unanimous consent to speak for up to an hour as if in morning business. the presiding officer: without objection, so ordered. mr. burr: i thank the president. mr. president, i came to the floor last week for north of 95 hours an spoke about the bill that -- -- and spoke about the bill that will be disposed of as this week goes on. and specifically an amendment that though nongermane postcloture, the majority leader has agreed to hold a vote on it. to me this will be one of the most important votes members in this body cast this year. let me say this again. i believe this is one of the most important votes members in the united states senate will cast this year. now, let me try to say. why this is a debate about the regulation of tobacco. and to start with members need to be reminde