Hagan joins other senators in seeking assistance for auto dealers
WASHINGTON, D.C.
In an effort to assist struggling automobile dealerships, U.S. Sen. Kay R. Hagan (D-N.C.) has joined 22 of her Senate colleagues from both sides of the aisle in urging President Obama to expand the availability of credit for the country’s automobile dealers.
More than 1,000 dealerships have closed in the past year at a staggering cost of more than 50,000 jobs.
“Our automobile dealers in North Carolina and around the country are an important part of our economic engine,” Hagan said.
“The currently-frozen credit markets threaten their very existence, which in turn threatens the job security and healthcare of thousands of workers and their families. In this economy, we need to be taking pragmatic steps to save and create jobs. I was proud to join my colleagues in urging President Obama to act quickly to make credit more readily available to these employers in order to prevent future losses.”
The letter mentions several types of credit used by auto dealers, but draws attention to the specific need for wholesale inventory or “floorplan” loans. Without access to this vital type of financing, dealers are unable to purchase new inventory and many are forced to close. The floorplan lending market is contracting under the stress of the current economic downturn, forcing many auto dealers to close their doors.
The letter, which was sent to the White House last Tuesday, suggests a two-part course of action. First, the Senators recommend expanding access to Small Business Administration lending – similar to a move made by President Carter in 1980 to address another credit crunch.
Second, the letter suggests that the Federal Reserve take appropriate steps to ensure that the Term Asset-Backed Securities Loan Facility (TALF) includes measures to adequately assist auto floorplan lenders.
Automobile sales is a multi-billion dollar industry in North Carolina. An estimated 692 new-vehicle dealerships in the state post total annual sales of $20.5 billion. These dealerships employ over 32,000 individuals in the state with a total annual payroll of $1.51 billion.
Click here to see the full letter and the signatures.
http://media.gatewaync.com/hdr2/pdfs/040709_Senate_auto_dealer_financing.pdf
