Lawmakers take issue with Pennsylvania & Ohio losing most

Interesting article that caught my attention Lawmakers Chide Automakers Over Dealership Cuts:

Out of the 1,323 General Motors dealers targeted for elimination, the most will come from Pennsylvania. Ninety dealerships will be forced to wind down in the state. Pennsylvania is followed by Ohio with 79, Illinois with 66, California with 65 and New York with 60.

This is going to have a big impact on these states, and there has been a great deal of discussion if there is any political motivation to the closings.

CNN has more:

The dealers and John McEleney, chairman of the National Automobile Dealers Association, argued that closing dealerships does not affect the automakers' bottom lines. Dealers are independently owned and operated, and do not receive significant administrative support from manufacturers, they said. Furthermore, many of the dealerships set for termination are profitable.

"Everyone agrees that both Chrysler and GM need to decrease costs and increase revenue to survive, but eliminating dealerships does neither," said McEleney, in testimony. "The manufacturer's costs do not vary whether there are 6,000 dealers or 3,000 dealers."

The dealership owners agreed. "Our dealerships do not cost auto manufacturers a penny," said Alan Spitzer, who owns Spitzer Automotive Group of Elyria, Ohio, which has seven dealerships that are slated to be shut down by GM and Chrysler. "All products and services, which Chrysler and GM provide to a dealership, are charged back to the dealership at a profit. If we lose money it comes out of our pocket, period."

Which if that is true, leads to interesting questions as to why this is being done...