A spending bill that could have massive ramifications on the
auto-industry and in turn, auto-transport companies, has recently passed a vote
in Congress. The spending bill had a measure
written into it that would force General Motors Co. and Chrysler Group LLC to
restore franchise agreements with dealerships.
When both companies restructured during their bankruptcy each one
decided it would be prudent to close a large number of dealerships. GM decided to close over 2,000 while Chrysler
closed nearly eight hundred. The measure
built into this new spending bill would reverse these closings. But how would this affect the auto-transport
industry? Some auto-transporters may
have seen elevated business due to dealership closings, as they moved cars from
closed dealerships to the few that remained open, but how long would this last? Obviously, the best thing for auto-transporters
would be for the American car industry to make a full and complete rebound--but
whether or not re-opening closed dealerships will help or harm this is a topic
of serious contention.
The White House is actually opposed to this measure because it
interferes with a closed Judicial bankruptcy proceeding and could even require
legal action at a later date. And, naturally,
the auto companies that restructured are opposed to this measure as well. Both GM and Chrysler feel as if restoring the
dealerships will slow down their rebuilding plans as they struggle to become
relevant in the global market. The
Chrysler vice president, Peter Grady said, “There are simply too many dealers
for not enough sales.” But on the other
side of the argument is the House of Representatives and the measure's author,
Steve LaTourette. LaTourette said
"I don't think Chrysler or GM has been able to demonstrate there are
savings associated with fewer dealers, since the dealers themselves bear the
costs of operating their dealerships with little help from the
manufacturers."
While it’s difficult to know which side is right as of now,
it’s plain to see that there is a lot at stake.
It is too soon to tell if this new measure will have catastrophic
effects on GM’s and Chrysler’s reconstruction plans; or help jumpstart the
economy and give jobs back to nearly 200,000 people across the United
States. There has been some speculation
that the bill will likely not pass a vote in the Senate and the main reason for
the measure was to pressure GM and Chrysler to develop a better method to close
excess dealerships.
There is no way to know how this measure will affect
auto-transport companies or if it will even pass. But in an unstable economy the best way to
stay profitable is by remaining adaptable while still providing consistently
excellent customer service even when the road ahead seems perilous.