Contact:	Clarence Mills (202) 543-1440 c.mills@att.net
For Release:	Immediate News Bulletin PR-43 May 26, 2009

House Judiciary Reviews Automaker Bankruptcy Impact

No Congressional Action Scheduled

WASHINGTON, D.C., May 26, 2009 - The U.S. House of Representatives Judiciary Committee hastily called a hearing to review "Ramifications of Auto Industry Bankruptcies" just prior to the Memorial Day recess. Witnesses focused on the impact of the Chrysler and possible General Motors Corp. bankruptcies on new car dealerships, employees and consumers.

Rep. John Conyers Jr., D-Mich., chairman of the Judiciary Committee, raised concerns about the high number of dealership closures. Conyers said, "First, we have thousands of dealers - many of whom are small, family-run businesses that have been passed from one generation to the next - being summarily terminated by Chrysler and GM. Some say it makes absolutely no economic sense to terminate these dealerships, and that doing so could actually undermine the ability of our nation's auto industry to regain its financial stability. Customers are already anxious about whether their repair warranties will be honored. Now they will also have to worry about whether their local dealer will stay in business long enough to service their car. Or whether they will have to drive a long distance to some other dealer. Or whether they should just purchase their next auto from a foreign car dealer, to have some assurance of continued service."

Consumer advocate Ralph Nader called on Congress to exercise more review of what was taking place with the administration's automotive task force. Joan Claybrook, president emeritus of Public Citizen, stated that throughout these processes there had been no initiative or agreement that improves motor vehicle safety.

Claybrook said, "Advancing a strong national highway traffic safety agenda is critical for many reasons. First, prevention is the key to saving lives and reducing injuries. General fleetwide improvements in vehicle safety through design, technology and behavioral responses reap benefits in reducing fatalities and serious, traumatic physical injuries. Second, progress toward crash prevention and vehicle crashworthiness provides economic benefits by reducing public health care costs for medical response to crash scenes, emergency room visits, hospital and rehabilitation stays, long-term care, physical and occupational therapy, reduced time away from work, and other medical treatments. Since motor vehicle crash injuries and costs are a major contributing factor to health care and employment costs, crash avoidance and injury prevention should be part of any well-developed policy initiative to bring national health care costs under control."

Clarence Ditlow, representing the Center for Auto Safety, focused on specific Chrysler vehicle safety issues and the rights of consumers by recommending the following:

1) The "New Chrysler" assume the liability for all personal injury and consumer liability claims of Chrysler LLC, the "Old Chrysler."

2) The "New Chrysler" take out an insurance policy to pay such claims.

3) The government create a fund sufficient to make consumers whole should the "New" fail to pay personal injury and consumer liability claims. Such fund should also cover consumer losses associated with bankrupt dealers failing to pay off liens on purchase of new vehicles.

4) When GM goes bankrupt, take the same steps outlined above for Chrysler to ensure that consumers are protected, and

5) As recommended by the International Association of Lemon Law Administrators in the attached statement, which I have been asked to deliver, honor all lemon law claims regardless of when a vehicle is purchased.

Randolph Henderson, a Chrysler-Jeep dealer, representing multiple dealer organizations, informed the Committee about:

1) The devastating impact of the Chrysler Corporation's bankruptcy and possible GM bankruptcy on the dealership body,

2) the lack of transparency and accountability in the taking of our properties and livelihood, and

3) the disparate impact of the proposed dealership reductions on the minority dealer community.

The Judiciary Committee does not have legislation scheduled for Committee action that will address issues presented at the hearing.

To view testimony from the hearing, visit ASA's legislative Web site at www.TakingTheHill.com.

The Automotive Service Association is the largest not-for-profit trade association of its kind dedicated to and governed by independent automotive service and repair professionals. ASA serves an international membership base that includes numerous affiliate, state and chapter groups from both the mechanical and collision repair segments of the automotive service industry. ASA's headquarters is in Bedford, Texas.

ASA advances professionalism and excellence in the automotive repair industry through education, representation and member services. For additional information about ASA, including past news releases, go to www.ASAshop.org, or visit ASA's legislative Web site at www.TakingTheHill.com.

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