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ND Sen. Dorgan questions auto dealership closings

Car dealership closings disproportionately affect rural states such as North Dakota, said Sen. Byron Dorgan, D-N.D.

The senator requested a Senate Commerce Committee hearing for early next month to examine the issue.

Chrysler recently announced that seven of its 22 North Dakota dealerships will close June 9. GM has announced it will close 1,100 dealerships nationwide in October 2010.

"I understand the financial reality that some auto dealerships probably need to be closed, but I don't understand the criteria that Chrysler used," said Dorgan. "In rural states like North Dakota, these dealerships are some of the largest employers in the community, and they have a customer base that extends throughout the region."

Matthew Larsgaard, executive vice president of the Automobile Dealers Association of North Dakota, said it seems there have been some arbitrary decisions made and he applauds Dorgan's efforts to seek more transparency.

"Many dealerships in North Dakota are a cornerstone to their community," Larsgaard said, adding that dealership closings could have a detrimental economic impact to the communities in which they're located.

Closings also could impact North Dakotans' ability to get their car serviced by a dealer, Dorgan said.

"Chrysler is going as far as prohibiting the dealerships that will be closed from even doing any warranty work in the future," he said. "That will mean some long drives for rural North Dakotans to get their vehicles serviced under warranty."

Dorgan said Chrysler and GM have a responsibility to close their dealerships in a way that's fair to the people who have been running the shops for years.

He also wrote to the CEOs of Chrysler and GM to question the wisdom of shutting down dealerships in rural America, a news release stated.