Leggett Sticks Up for Auto Dealers

County Executive Ike Leggett wrote the following two letters to Governor O'Malley and the U.S. Treasury Department on the impending closures of auto dealerships.

May 27, 2009

The Honorable Martin J. O’Malley
Governor of the State of Maryland
State House
100 State Circle
Annapolis, Maryland 21401

Dear Governor O’Malley:

I am writing to express my concern over the recent decisions made by our country’s domestic automobile industry, and to make a recommendation that could potentially assist current car dealerships in the State of Maryland that are being impacted by these actions.

The approximately 425 automobile dealerships in the State generate many benefits for communities throughout Maryland. These companies provide jobs to our residents (approximately 25,000 in 2008), and valuable revenues to government coffers. Many of these businesses are long-standing family enterprises where the ownership of these businesses has been passed down from generation to generation. In addition to the positive economic impact these businesses provide, automobile dealerships have historically been the epitome of “good corporate citizens.” They are, in essence, a critical part of our community’s social and economic fabric.

As you may be aware, the State of Maryland – through its Motor Vehicle Administration – licenses new automobile dealerships. Many dealers in Montgomery County who have been notified of GM’s or Chrysler’s intention to terminate their franchise agreements believe that their existing dealership license will simply be given to a new dealership in the same market in the relatively new future. This seems unfair to local businesses which have historically contributed to our local economy, and unfair to consumers who rely on the continuity of these businesses to service their vehicles. In these trying economic times, it does not make sense for the State to support the concept of replacing terminated car dealership franchises with new ones.

Along these lines, I am recommending the State of Maryland announce that it will not issue any new automobile dealer licenses until General Motors and Chrysler complete the formal termination process with those dealers who are being affected. By doing so, our domestic automobile industry will hopefully come to recognize that our State is not interested in replacing terminated car dealership franchises with new ones, but rather, is interested in maintaining the viability of our existing local automobile businesses.

Thank you for considering this request and for your attention to what is an important issue relative to the State’s economy and economic climate.

Sincerely,

Isiah Leggett
County Executive

Cc: Senator Barbara Mikulski
Senator Ben Cardin
Congressman Chris Van Hollen
Congressman Roscoe Bartlett
Congresswoman Donna Edwards
Senator Rich Madeleno
Delegate Brian Feldman
John T. Kuo, Administrator, Maryland Motor Vehicles Administration
Christian S. Johansson, Secretary, MD Dept. of Business and Economic Development


May 22, 2009

The Honorable Steven Rattner
Counselor to the Secretary of the Treasury
United States Department of the Treasury
1500 Pennsylvania Avenue, N.W., Room 1332
Washington, D.C. 20220

Dear Mr. Rattner:

On behalf of the citizens and businesses of Montgomery County, Maryland, I am writing to express our concern over the recent decisions made by our nation’s domestic automobile industry that will result in the elimination of local car dealerships, jobs and important tax revenues for communities like ours.

Automobile dealerships are an important component of Montgomery County’s and the nation’s economy. The approximately 60 dealerships in our community employ over 5,000 workers with many other workers indirectly serving the auto dealerships. Many of these businesses are long-standing family enterprises where the ownership of these businesses has been passed down from generation to generation. In addition to the positive economic impact these businesses provide, automobile dealerships have historically been the epitome of “good corporate citizens.” They are, in essence, a critical part of our community’s social and economic fabric.

I would first like to ask the Presidential Task Force on the Auto Industry to re-examine the aggressive timeline associated with notifying local automobile dealerships of franchise cancellation plans and implementing subsequent termination procedures. Closing a myriad of dealerships in Montgomery County in the months ahead will place undue pressure on the already fragile state of our community’s economy.

Additionally, many in our County are questioning the economic rationale behind the massive closure of these dealerships, which provide essential goods and services to our residents while also providing significant revenue to their parent corporation. I join my colleagues throughout the country in respectfully requesting that you release the documentation that highlights the presumed financial savings that will accrue to our domestic car manufacturers by closing local dealerships.

Finally, I would like to call to the Task Force’s attention the distinct possibility that the current actions being pursued by our domestic automobile industry will simply result in terminated franchises being replaced with new ones in the same market, six months to a year down the road. This seems unfair to local businesses which have historically contributed to our local economy, and unfair to consumers who rely on the continuity of these businesses to service their vehicles.

I recognize the massive and complicated job before the Presidential Task Force on the Auto Industry, and hope that it will take these concerns into consideration.

Sincerely,

Isiah Leggett
County Executive

Cc: Senator Barbara Mikulski
Senator Ben Cardin
Congressman Chris Van Hollen
Congressman Roscoe Bartlett
Congresswoman Donna Edwards