MCCLEAN, Va. — In an open letter to President Barack Obama, the chairmen of three leading auto dealer trade associations have expressed the urgent need for a freer flow of credit for vehicle purchases and floorplan financing.
Iowa dealer and National Automobile Dealers Association Chairman John McEleney, Russ Darrow of the American International Automobile Dealers Association and the National Association of Minority Automobile Dealers' Desmond Roberts penned the letter earlier this month.
The men blamed several factors, including a "precipitous decline in lender confidence," for "untenable economic conditions" for their member dealers and the industry as a whole.
"Within the past 12 to 14 months," they wrote, "approximately 1,000 dealerships have closed, putting more than 50,000 Americans out of work. On top of this, the crisis has prompted thousands of additional layoffs at the dealerships that are still operating. ... Unless this situation is corrected, efforts to stabilize the U.S. auto industry will fail, further complicating the revival of the broader economy."
Their solution? Make more credit available quickly by revitalizing the auto loan-backed securities market and expanding the Small Business Administration loan guaranty program to include floorplanning lines of credit.
"We need to restore the availability of credit for the automotive retailing network both to ensure the recovery of the overall auto industry and to preserve the economic foundation of communities all across the country," the chairmen concluded. "And time is very much of the essence."
The full text of the letter can be found here.