Panel I of a Hearing of the House Financial Services Committee - Auto Industry Stabilization Plans

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REP. MAXINE WATERS (D-CA): Thank you very much, Mr. Chairman, for arranging this second hearing on America's automobile industry.

Several weeks ago the automakers came before this committee and spoke in generalities on why they'll need assistance from the federal government. At that time there was -- (inaudible) -- for long-term viability. Now that the automakers have submitted a plan, I'm concerned -- they have submitted a plan, but I'm concerned about the plans that will be discussed today and how they will impact those such as small car dealers who are dependent on the auto industry to earn a living.

Several weeks ago we were told that a collapse of the Big Three would lead to the loss of 3 million jobs. That assumes that these plans still involve some pain for workers employed by the Big Three. GM, for example, states in their plan that they plan to cut at least 30,000 jobs by 2012.

In bailing out the Big Three, we can't forget the needs of Main Street and the impact these plans will have on everyday, working Americans and the communities in which they live.

This is true especially in light of the fact that we're still in the midst of a foreclosure crisis, and America's struggling homeowners are in need of assistance. This brings me to the nation's small car dealers. In their plans, each automaker states that they have too many dealers and need to downsize. Ford says that it plans to work collaboratively with their dealers to reduce its dealer network. GM says that is plans to slash its dealer network by 35 percent. Chrysler simply says that it plans to rationalize its dealer network, without providing any specifics.

What none of them say is what the impact this rationalization, consolidation or reduction in the number of dealers will have on those dealers and the local communities and local economies they support.

On November 30th, The New York Times published an article entitled "Auto Dealerships Teeter as Big Three Decline." I'm interested, Mr. Chairman, in trying to understand how this bailout will help the small dealers. I yield back.

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