Commentary

It’s time once again for car dealers to get on the white horse and ride to Washington to help rescue the automotive industry.

Auto makers are imploring dealers for their help. General Motors and Chrysler are urging dealers and dealership employees to contact their congressional and Senate members to voice support for $25 billion in loans that would be added to the $25 billion already approved by Congress a few weeks ago, yet needs to be appropriated.

Auto makers are struggling to get their message across on Capitol Hill.

Despite numerous meetings with White House officials and congressional leaders, the opposition to a bailout of the auto industry is climbing to a scary crescendo and may well sink the car companies’ efforts.

The U.S. Senate will begin hearings on a bill on Nov. 17 to provide $25 billion in emergency loans to the industry, with a test vote scheduled for Wednesday. But political leaders doubt the votes are there to get it passed, with much of the opposition coming from Republicans.

Dealers have the political and financial clout to help push the legislation through. They are the ones responsible for large portions of state and local tax revenues and in many cases helped get House and Senate members elected.

It’s time to use that clout.

The ugly truth is it doesn’t matter how much money is given to auto makers if cars aren’t being sold. Dealers are reporting two problems – no showroom traffic and an inability to get most loans financed.

It’s not bad management decisions threatening the auto makers’ survival – it’s the lack of demand. Consumers have lost confidence and financial institutions aren’t lending money to potential GM and Chrysler customers.

You think the October sales numbers were unprecedented, wait until the November numbers are reported. The downturn is beyond anyone’s wildest imagination and threatening to push GM and Chrysler out of business within a couple of months and Ford sometime later in 2009.

There’s no recovery if there are no sales. Any bailout needs to include a way for GMAC and other lending institutions to start financing sales again.

The best way dealers can improve their chances of survival is to descend on Washington en masse either personally or by phone, email and letter-writing demanding assistance.

Strangely, dealers have been relatively quiet so far. The National Automobile Dealers Assn. sent a letter to the White House, which was followed by a letter from the National Association of Minority Dealers outlining specific steps necessary to help dealers survive. Other than that, there has been little effort or success in dealers getting their message out.

NADA, NAMAD and the American International Automobile Dealers Assn. have been lobbying Washington for their own assistance, but now it’s time for them to lobby on behalf of the auto makers.

There have been a few isolated voices. Ron Tonkin, owner of the powerful Tonkin Automotive Group in Oregon, is calling for an immediate $2,500 tax credit for customers buying domestic-brand vehicles built in the U.S. This is from a dealer who only has two domestic franchises to go along with 13 import brands.

Tonkin tells Ward’s if one or more of the Detroit Three goes down, the importers also will feel the repercussions.

Meanwhile, Steven Fader, CEO of MileOne Automotive, a multibillion dollar private dealer group on the East Coast, helped Maryland Sen. Barbara Mikulski craft “The Mikulski Auto Ownership Tax Assistance Amendment” to help kick-start vehicle sales.

The bill proposes all sales/excise tax and the interest paid on automotive loans be made deductible for new car and truck purchases between Nov. 12, 2008, and Dec. 31, 2009.

AutoNation Inc. CEO Mike Jackson also is making the rounds on various TV shows and in Washington urging support of a federal bailout.

Historically, dealers have shown they can get it done. It was dealers in 1980 who convinced Congress and former President Jimmy Carter to provide aid to the auto industry. The package included the $1.5 billion loan to Chrysler, along with $400 million in loan guarantees for dealers.

The loans were paid back early due to a significant increase in car sales – which probably would not have happened without the loans.

So to all the dealers out there: Time to Giddy up!

cbanks@wardsauto.com