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Nader calls for more scrutiny of automakers

Ralph Nader is calling on Congress to hold hearings into dealership and factory closures at automakers Chrysler LLC and General Motors Corp.
/ Source: The Associated Press

Ralph Nader called on Congress to hold hearings into dealership and factory closures at automakers Chrysler LLC and General Motors Corp. before “irreversible measures” are taken.

The consumer activist and former presidential candidate sent a letter Monday to Democrats Sen. Chris Dodd and Rep. Barney Frank saying Congress has ceded oversight of the automakers’ restructuring to a task force of presidential advisers. The industry restructuring has so far been led by the auto task force, a group of advisers appointed by President Barack Obama earlier this year.

“Thus has the future of a centerpiece of American manufacturing capacity been delegated to a small unelected and largely unaccountable group,” Nader wrote. “Congress must, at the least, reclaim its oversight role in this process and subject the auto task force’s proposals and plans to careful scrutiny before irreversible measures — such as a GM bankruptcy filing — are undertaken.”

Nader raised several questions on the restructuring that Congress should take up, including whether the automakers really need to close so many dealers and factories and whether taxpayers’ interests are being adequately protected. Congress should also examine whether GM will build in the U.S. the cars it sells here after its restructuring is complete, he said.

“While the company needs a new direction, and probably a contraction, it is not obvious that it needs to contract as much as the secretive task force envisions,” Nader wrote.

Requests for comment were left with Frank, D-Mass., and Dodd, D-Conn., on Monday.

Chrysler, which is in Chapter 11 bankruptcy protection, last week asked the bankruptcy judge presiding over its case to terminate franchise agreements with 800 dealerships in the coming weeks, while GM told 1,100 dealerships it will not renew their contracts next year. Both automakers accepted billions in government aid and are laying off workers, closing factories and cutting models under a government-imposed restructuring process.

Chrysler is racing to secure a merger with Italian automaker Fiat Group SpA. GM has until the end of May to clear several hurdles in its restructuring or it also faces the prospect of a bankruptcy filing.