Monday, July 26, 2010

July 23, 2010

To all my customers....

Please accept my thanks for all your support.

Some months ago I asked for your help to contact the White House and members of Congress about the Auto Task Force closure of dealerships, including several of ours. Thanks to grass roots support, the US congress created a statute allowing arbitration, and we were able to maintain all of our General Motors franchises and our Florida Chrysler Jeep franchises.

At the request of Senator Rockefeller, Chairman of the Senate Commerce Committee, the Office of the Special Inspector General (SIGTARP) conducted an audit of the process and fairness of dealer closings. The full report is available on our website at

The Audit Report from the Inspector General confirms what the Committee to Restore Dealer Rights has said from the very beginning. The Auto Task force got very bad advice and hurt rather than helped GM & Chrysler by forcing them to close dealerships. Both are down in retail sales (Chrysler much more than GM). Ford, who did not cut dealers, is way up.

The assertion that closing 25% saved 75% of dealers is absurd. The IG report calls this a “false dilemma with no factual support.” It notes that no member of the Auto Task Force has any experience in the auto industry.

The report points out in detail why dealerships should not have been closed. It notes that most of the “experts” that recommended the closings were Wall Street analysts.

Senator Rockefeller, who requested the Audit, confirms that “Congress did the right thing when it gave all dealers a right to appeal terminations before a neutral arbiter.”

It should be obvious to any reader of the audit report that had it been released in March or even April, there would have been very few dealer losses in Arbitration.

It appears that Treasury simply used its power to delay the release until the six month time period for arbitrations provided in the statute had expired.

In addition to the report being late, the American Arbitration Association (AAA) caused a log-jam of cases near the end of the six months by refusing to force the manufacturers to the table. This capitulation to the will of the manufacturers by AAA resulted in some dealers having to forfeit their right to individual arbitrations and engage in “group” arbitrations or settle with none at all.

In our case in Maryland, four dealerships were lumped into one arbitration because there were only seven days left in the time allotted by the law. This was obviously unfair but the AAA did nothing to stop it, and the resulting confusion by the arbiter was obvious in our loss.

Despite the loss of these four franchises, the level of business of other franchises at these four Auto Mall locations increased enabling us to protect the jobs of every Fitzgerald employee. We would not be able to say this if it were not for General Motor’s decision to restore all our affected GM franchises. GM’s gracious offer to reinstate our franchises without the need for arbitration bears special recognition. They read the many letters from our customers and listened.

In closing, please know that were it not for the many calls and letters from customers, even more jobs would have been lost and dealer closures could not have been turned around. We very much appreciate your phone calls, emails and letters of support. Customer efforts resulted in us being called “consumer advocates” by the arbiter in the Florida case. We are grateful to you and we will never forget your support.

Thank you,

Jack Fitzgerald