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Dorgan, Klobuchar question auto executives about closing dealerships

Sens. Byron Dorgan, D-N.D., and Amy Klobuchar, D-Minn., questioned Chrysler and General Motors officials at a Senate Commerce Committee hearing Wednesday about closing rural dealerships.

Sens. Byron Dorgan, D-N.D., and Amy Klobuchar, D-Minn., questioned Chrysler and General Motors officials at a Senate Commerce Committee hearing Wednesday about closing rural dealerships.

"Many of these dealerships have served the auto companies for 60 or 80 years," Dorgan said.

Chrysler filed for bankruptcy on May 14 and told 789 dealers across the country that they must close by Tuesday. Dealerships being shuttered include Fargo's Lunde Jeep, Lloyds Motors in Jamestown, N.D., Nereson Jeep of Detroit Lakes, Minn., and Salem Motors in Crookston, Minn.

General Motors an-nounced plans to close 1,100 dealerships nationwide by October 2010. One GM dealer from the region - Nelson Auto Center in Fergus Falls, Minn. - sent a representative to the hearing.

According to a news release, Dorgan said negative impacts of Chrysler's decisions include:

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  • One dealership completed a $5 million showroom and was told months later that they would no longer have a franchise
  • Rural customers will travel for hours to receive warranty work, and Chrysler won't allow closed dealerships to conduct service work under warranty

      "I know that Chrysler and General Motors are trying to become profitable, but they have an obligation to treat their dealerships and their consumers fairly," Dorgan said.

      Klobuchar said in a news release that she questioned how officials decided which dealers to close, especially ones doing well despite the current economy.

      "This isn't just about Detroit or Washington," Klobuchar said. "This is about locally owned businesses, as well as the employees, customers and communities who depend on them."

      She has co-sponsored legislation giving dealerships 60 extra days to close operations and sell inventory.

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