• Logout
  • Member Center

THE FINANCIAL CRISIS

South Florida auto dealers push aid for carmakers

Local car dealers are pressing Congress to approve a rescue plan for ailing U.S. carmakers.

pdanner@MiamiHerald.com

Car dealers from South Florida and the nation will be lobbying Congress on Tuesday to plead with lawmakers to extend a lifeline to ailing U.S. automakers.

The Senate Banking Committee is holding a hearing at 3 p.m. Tuesday with the heads of the Detroit three -- Ford, General Motors and Chrysler -- and the president of the UAW to discuss a possible loan. The help is critical not just for the survival of manufacturers, Tamarac auto dealer Jim Arrigo said, but also for the dealers who sell their cars.

''There will be a lot of people all across the country that would be hurt tremendously by any one of these companies going out [of business],'' Arrigo, who owns a Chrysler, Dodge and Jeep dealership in Tamarac, said from Washington. Arrigo is among dozens of U.S. car dealers who traveled to Washington on Monday. ``If Chrysler quits sending me cars, I've got to close my doors.

Arrigo has a lot of company this week. Dozens of dealers descended on Washington to make their case for a carmaker rescue plan. General Motors, Ford Motor and Chrysler want $25 billion in loans to stabilize their ailing businesses and weather the slide in car sales.

''We're not looking for a bailout,'' said dealer Louis Vera, a partner with G. Ed Williamson II in 10 GM franchises in South Florida.

''We're not looking for a blank check. We're looking for bridge loans,'' said Vera, also in Washington to lobby South Florida representatives.

Republicans and Democrats agree that Detroit's auto companies are in desperate straits and should get government money to keep them from going under, but they disagree on where the funds should come from.

STAKE IN COMPANIES

Democrats want to carve out $25 billion from the $700 billion Wall Street bailout for a bridge loan to the auto industry, in exchange for a government ownership stake in the auto companies and a federal oversight board that could veto carmakers' business decisions. The proposal has the support of automaker and their labor unions.

The White House and many congressional Republicans are opposed. They want to rewrite the terms of a $25 billion loan program Congress approved in September to help automakers retool their factories for manufacturing more fuelefficient vehicles that comply with stricter rules set by Congress a year ago. That money instead would be used to address the carmakers' short-term financial problems.

For now, Republicans have the upper hand. Democrats may be able to push legislation through the House, but the Senate is narrowly divided along party lines. Even if the bill gets to President George W. Bush, he could veto it.

President-elect Barack Obama has expressed support for helping the automakers, but the companies say they can't wait till he takes office on Jan. 20.

Mike Jackson, chairman and chief executive of Fort Lauderdale-based AutoNation, the nation's largest automotive retailer, met with some senators on Monday, a spokesman said. Jackson, among a group of CEOs scheduled to have dinner Monday night with Treasury Secretary Henry Paulson, wasn't available for comment.

The economic slowdown and the steep credit crunch have slammed the car industry. Car sales last month fell to their lowest level in more than 17 years.

That's because the auto industry is reeling, slammed by the economic slowdown and the credit crunch.

Vera said that before the downturn, sales per store topped 100 vehicles a month. Now that figure is down to about 30, a drop he blames on a lack of consumer confidence and tighter credit markets.

''It's a drastic reduction in sales,'' Vera said.

He's hoping to meet with South Florida members of Congress, including Republicans Sen. Mel Martinez and Rep. Mario Diaz-Balart and Democratic Reps. Ron Klein and Debbie Wasserman Schultz.

Other South Florida dealers had different takes on the rescue plan.

''They should help them,'' said Al Hendrickson Sr., chairman of Al Hendrickson Toyota in Coconut Creek. ``If they went under, it would have a devastating effect. But to give them a blank check or not have any controls on the loans would be ludicrous.''

DISSENTING VOICE

At least one local dealer doesn't believe the automakers deserve taxpayer help. Norman Braman, president of Miami's Braman Motors, whose franchises include a Cadillac dealership, said pouring money into the carmakers would be like ``investing in a bottomless pit.''

''Unless the government is prepared to constantly feed them money, it will be the same situation,'' Braman said. ``GM would be far better off reorganizing under the bankruptcy laws. I feel that's the only chance they have.''

An automakers' bankruptcy filing would ripple through the automotive industry and lead to the other U.S. carmakers following suit, said Glenn Gardner, a Holman Enterprises vice president. The company has 10 South Florida franchises, including four Lincoln-Mercury stores..

The Associated Press contributed to this report.

Join the discussion

Note: If this is your first time using our NEW commenting system, you will have to LOG OUT and then LOG BACK IN.

The Miami Herald is pleased to provide this opportunity to share information, experiences and observations about what's in the news. Some of the comments may be reprinted elsewhere in the site or in the newspaper. We encourage lively, open debate on the issues of the day, and ask that you refrain from profanity, hate speech, personal comments and remarks that are off point. In order to post comments, you must be a registered user of MiamiHerald.com. Your username will show along with the comments you post. Thank you for taking the time to offer your thoughts.

Comments (0)
  • Videos

  • Quick Job Search

Enter Keyword(s) Enter City Select a State Select a Category