gm cars. commercial decision was made that those warranty holders, if you made them angry, probably wouldn't buy a new gm car. in all these cases we believe with the company in the lead and the treasury questioning them every step of the way, commercial decisions were made about to treat each constituent. i believe that everyone has made enormous sacrifice and those sacrifices have met 2 tests. in each case the stack -- stakeholder did better than he would have if the government had not intervened and he was treated in a fair way given the commercial realities of marketplace. in the chrysler case, a bankruptcy judge heard over 30 hours of testimony on this exact set of questions and ruled completely in our favor in a very detailed, 47 page opinion, it was upheld unanimously by the court of appeals and decided not to take up the matter. they did not see any issues that rose to them. this has received enormous scrutiny at all levels and in the media. we are confident that this has been done in a commercial fashion. we understand there are a lot of disgruntled, unhappy people. but in a failed enterprise

gm cars. worked on its balance sheet, many billions of dollars. the commercial decision was made that those warranty holders, if you made them angry, probably wouldn't buy a new gm car and your best base of future car buyers is prior car buyers. in all these cases we believed in a very clear-eyed way with the company in the lead and the treasory questioning them every step of the way commercial decisions were made about how to treat each constituent. i believe everyone has made enormous sacrifice and i believe those sacrifices have met two tests. one, in each case, the stakeholder did better than he would have if the government had not intervened and second, he was treated in a fair way, given the commercial realities of the marketplace. as you know, in the chrysler case, a bankruptcy judge heard over 30 hours of testimony on this exact set of questions and ruled completely in our favor in a very detailed 37-page opinion. it was jump held unanimously by the court of appeals and the supreme court just decided not take up the matter. they did not see any issues that rose to them. i believe this received enormous scrutiny the all levels and we are quite comforta

when a difficult decision must be made on where to open a new plan or what type of car to make the new gm, not the government, will make that decision. our goal is to get gm back on its feet, take a hands-off the purchase, and get out quickly. exiting requires not only new investment by giving gm a chance to start by clearing away the massive past debts weighing down the company. that is why earlier today gm did what chrysler has successfully done and filed for chapter 11 bankruptcy with the support of its key stakeholders and at the u.s. government. in all likelihood this process will take more time for gm than it did for chrysler because gm is a bigger, more complex company. chrysler's extraordinary success reaffirms my confidence that gm will emerge quickly. and as a stronger, more competitive company. i want to remind everyone that if you're considering buying a gm car during this time of restructuring your warranties will be safe and a government- backed. i am confident the steps i am announcing today will mark the end a neof an old gm and the beginning of a new gym, one that can lea

car. there is no choice but to do that. you will see that retooling. gm is looking at a newar, b and c models, one is literally 8 meters long. it is a lot like the smart cars at uc around. they will have to make that transition. it is the only way to hit that target. -- like the smart cars that you see around. the big thing, particularly in the next two years is the electric hybrid car. gm has the volt. the four manufacturers have them too. for those cars, the plug-in hybrids you will see a dramatic increase in the mileage. maybe you can offset the other size reduction on those vehicles. host: there is a provision you have supported in the house. it is called cash for clunkers. explain that piece of legislation. guest: remember that sales have plummeted. 16 different nations around the world already passed legislation, have this program in place whether germany, south korea, where there is an additional incentive. you get your best deal with your local auto dealer, and then if the car is scrapped you get money on top of its. then you either buy a new car or lease one. you ge

gm? why did the administration instead favor a merger between chrysler and the italian car maker fiat and what did the administration base its conclusion that the new chrysler will be viable in the long run? did the administration take into consideration the effects that the aid to gm and chrysler would have on other auto manufacturers in the u.s.? what underlays the determination that the u.s. treasury should hold approximately 10% of the new chrysler and 60% of the new gm? by taking such significant equity stakes in the two companies, the administration has embarked on a disturbing and i believe a difficult road. we've been assured that the administration will stay out of day-to-day management and that it will not allow politics to influence the decision-making process within the companies. on the one hand, that's very reassuring. on the other, it illustrates the inherent difficulty posed by large government interventions in private markets. if the government intends to be a silent partner of sorts, how do they intend to protect the interest of the american taxpayer as a shareholder? i'm not sure you can have it both ways. restraint may be diffic

a new gm will contribute to america's economic strength and competitiveness and this, of course, starts and ends with great cars and trucks and great dealers. thank you very much. >> thank you, sir. finally, mr. john mceleney, chairman of the national automobile dealers association. >> thank you, mr. chairman. mr. chairman, senator hutchison, i am chairman of nada and the national automobile dealers association. i am also an automobile dealer. my dealership is mcelenen center in clinton, ohio. we have actually been in business 95 years. we provide jobs for 140 people. my family also held a chrysler franchise between 1984 and 2007. mr. chairman, we commend you and we thank you and senator hutchison for convening this hearing. in three face-to-face meetings with the president's auto task force, and at numerous meetings with the manufacturers, no one has explained why dealer reductions will make chrysler and gm more viable. over 90% of chrysler and gm's revenue comes from the dealer, because the dealer buys the cars, the parts, and even the dealership signs from the manufacturer. the retail network, the land, the

new chrysler and severely damaged gm's survival. dealers are there only customers. we are the face of these once proud car companies in our communities. the fact that we have survived and prospered over the last 100 years, even as they often produced vehicles american consumers did not want, proves that independent entrepreneurs find ways to survive and create employment opportunities even in tough times. if congress does not step in, dealers will be unwilling to invest in new facilities purchase them in the dollars of inventory and otherwise risk their capital in as straight law protections are meaningless and it can all be taken away in the next downturn. fewer dealers today mean fewer sailors of chrysler and gm products tomorrow leading to a further erosion of market share for both companies. allow the marketplace to select who lives and who dies, not some committee in detroit. as of today, approximately 350 of the 789 rejected dealers have accepted their fate by objecting -- by not objecting to their terminations. does, the accelerated rate of reduction of dealerships has already incurred for those wh

that studhorse it would have been at gm telling the obama white house to go get some new management is what would have happened. karzai the reliable especially the cars but neither our horses and a list of cars it is not personal. horses have complex psychologies, they have little brains. horses are like your adolescence children's. cars are like your computer but the computer may be bulky and slow and may even be worth less, but it never addresses itself in all black, gives every part of its keyboard pierced, screams that you don't understand and goes out and takes the drugs and is brought home by the police at 3:00 a.m.. [laughter] actually horses don't do that either but you understand. changing a tire on a car is no fun but easier than issuing a horse and will get kicked or britain or have menorah dump on your head and was a change in a very bad neighborhood. you take apart and put it in a damp space and there for months and the spca will not get on your case. for that matter you could be a car in the street without raising in a public protest as long as you own a car that you are beating. even when opec is doing its worst, cars are more efficien

industry, chrysler, gm and large extent ford are facing this recession so but this would do is essentially provide cash incentive to people to trade and older and heavier vehicle and buy new cars off the lot so they get rid of some of the huge backlog of cars that exists right now. >> host: you had a good graphic company in an article you did last week with your colleague at "the wall street journal," john schmidle, about what the provisions would do and have a look at it here. the requirement for the trade in, if it's 18 miles a gallon or less is 1984 or after you can treated in. but you have to get, like, for a new car at least 22 miles per gallon, and then $4,500 subsidy. if it's less than 4 miles per gallon, 3500. >> guest: it's at least 4 miles, but 3500 if it is at least 10 miles improvement -- >> host: have they done any projections on not just in terms of what this would mean for the auto industry but what about for the environment? what about pollution standards? >> guest: this is one of the most controversial aspects. it is only a 4-mile per gallon improvement which isn't that much improvement. there was an alternative to legislation promoted by senators feinstein in