Tuesday, 24 March 2009 10:28
Kia Dealer Bob Cockerham Testified Before Congress on the Dealer Financing Crisis
Last week, New Mexico Kia Dealer and AIADA member Bob Cockerham traveled to Washington a single purpose: to help Congress understand the challenges of running a dealership in these troubled economic times. Accompanied by his wife, Mary, Cockerham prepared an emotional statement for the Senate Committee on Small Businesses and Entrepreneurship. The stakes couldn't have been higher: In less than a year the Cockerhams have been forced to close multiple stores and have reduced their staff from 80 full time employees to 17. Now they fear that without financing, they will have to declare personal bankruptcy.
Testifying during the hearing Perspectives from Main Street on Small Business Lending, Bob Cockerham reiterated the requests I made earlier this month in a letter sent to President Barack Obama. He asked for readily available retail credit to help generate automobile sales and operating capital loans to help dealers meet cash flow requirements. He also asked that the Small Business Administration loan guaranty program be updated with a new, larger size standard in order to provide auto dealers with floorplan financing.
"We have seen the large, ‘too big to fail' corporations literally given billions of taxpayers' dollars in bailouts, while the small businesspeople, like ourselves, have received, and asked for, nothing," said Cockerham in his testimony. "The greed of Wall Street is driving America's small businesspeople into bankruptcy." Thanks in part to the credit crunch, approximately 1000 dealerships closed last year and 50,000 jobs were lost.
"This is not just a Bob and Mary problem," Cockerham told the hearing room. "Thousands of businesses are in peril and we need some help." Fortunately for the Cockerhams, and for all of America's auto dealers, at least some folks in Washington were listening.
The day after Cockerham's testimony, eight senators, Republicans and Democrats, sent a letter to Treasury Secretary Timothy Geithner and Federal Reserve Board Chairman Ben Bernanke asking them to ease lending requirements for auto dealers. In the letter, the Senators noted that the AAA-rating requirement attached to Term Asset-Backed Securities Loan Facility (TALF) program effectively excludes financing of wholesale dealer inventories. They asked that the requirement be changed.
It's a small step, but it's a step in the right direction. There is a great deal of work ahead of AIADA as we continue to push for access to financing for our members. Bob and Mary Cockerham's story is a reminder that no dealer is too small, or too far away from Washington, to make an impact. Now is the time for all international dealers to band together and support AIADA in its efforts.
Russ Darrow, AIADA Chairman
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