GM, Chrysler dealer closings to be audited by U.S. Treasury

Posted on Thursday, September 24th, 2009 at 4:08 PM EDT.

The dealership terminations by General Motors Co. and the Chrysler Group will be audited by the inspector general for the U.S. Treasury Department’s financial bailout, the inspector is expected to say in congressional testimony, the Automotive News reported.

The audit will take place at the same time that dealer-rights negotiations are due to get under way, involving the two automakers, dealer groups, key lawmakers and the Obama administration’s auto task force, the story said. A separate audit likely will be conducted of Treasury’s ownership and management of GM since the company emerged from bankruptcy, the Automotive News said.

In written testimony due to be delivered today before the Senate Banking Committee, Neil Barofsky, special inspector general for Treasury’s $700 billion Troubled Asset Relief Program said his dealer audit “will examine the process used by General Motors and Chrysler to identify which automotive dealerships should be maintained or terminated.”

Some dealers have complained that the process was arbitrary and resulted in the closing of profitable stores, the publication said. GM and Chrysler say the terminations were carefully chosen to increase the automakers’ prospects for restoring profit after bankruptcy, the story said. (Automotive News)

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