Posted by
michael on Thursday, April 02, 2009 12:00:00 AM
WASHINGTON, April 1 - Auto dealers stepped up lobbying on Wednesday for government to help them finance their inventories, while lawmakers sought to broaden support for an auto sales incentive plan worth up to $2 billion.
The National Automobile Dealers Association asked members to support a Senate petition to the Obama administration to loosen a credit logjam, improve liquidity within the sector and stem dealership closings and job losses.
The group said more than 1,000 dealers have closed this year at a cost of 50,000 jobs.
"Credit is the lifeblood of the franchised dealers' economic model. Additionally, dealers, like many other businesses, need sufficient working capital to maintain cash flow," read a draft letter from Sen. Jeanne Shaheen, a New Hampshire Democrat, to President Barack Obama.
Dealers want the administration to expand access to Small Business Administration lending to help finance their floorplans.
Additionally, the group wants the Federal Reserve to expand criteria for a recently unveiled credit program to ensure struggling auto finance companies can qualify.
The major finance units for Ford Motor Co, General Motors Corp and Chrysler LLC and overseas manufacturers provide terms for dealers to purchase vehicles they sell to consumers.
"The number of floorplan lenders has declined within the past six months and lenders still in the market are insisting on terms and conditions that are not affordable for many businesses," Shaheen's letter said.
GMAC Financial Services said separately that it would resume making car and truck loans to subprime borrowers and will lower inventory financing costs for dealers.
GM and Chrysler financing units have already received billions in government aid.
SUPPORT FOR 'CLUNKER' PLAN
Additionally on Wednesday, proposals to stimulate auto sales took shape in the House of Representatives and Senate with any final action still weeks away, lawmakers said.
Competing proposals would offer a voucher worth up to $5,000 to consumers who trade in older, less fuel efficient vehicles for new ones that get sharply higher gas mileage.
"The American auto industry is in serious jeopardy. Now is not the time to point fingers or ask how we got here. The question is what Congress can do to help jump-start these companies, save jobs and create a more fuel efficient fleet," said a joint statement from Democratic Senators Dianne Feinstein of California and Charles Schumer of New York.
U.S. auto sales remain near 30-year lows and overseas manufacturers are also struggling.
GM, which is facing possible bankruptcy, saw its U.S. sales decline by 45 percent in March, according to figures released on Wednesday, while Ford sales fell nearly 41 percent for the month. Chrysler sales fell 39 percent last month.
Lawmakers in both houses estimate the sales incentive program, called "Cash for Clunkers," would cost up to $2 billion over four years. Funds would likely come from unused money from the U.S. economic stimulus package approved by Congress in February.
President Barack Obama endorsed the idea on Monday but no new federal spending is planned.
Rep. Steve Israel assumes a sales gain of between 500,000 and 1 million cars per year under a plan he authored. Israel said the program would result in a "major reduction" in greenhouses gasses, blamed for global warming, and other pollutants.
Lawmakers were warming to a provision that would permit consumers to use vouchers for buying imported vehicles in accordance with trade agreements. Some lawmakers, especially in the House, prefer that the incentive program benefit those vehicles made in the United States.
Overseas manufacturers have concentrated on producing more efficient gasoline-only and hybrid vehicles, while U.S. companies, until recently, have focuses mainly on less efficient trucks, vans and sport utilities.