"GM got bailed out and GMAC got bailed out, but it has not trickled down to the dealers, they made it harder to get money to do business with the financing of cars," dealership owner Robert Weirich said.
Tonight, Gallo's entire commercial truck inventory was being towed away by GMC because Gallo could not meet stiff new financing requirements set by the automaker.
"They basically gave me a 90 days notice to seek other lending institutions and it was like being thrown to the wolves; no one's lending money to the automotive industry," Weirich said.
Gallo is not alone. The Key Pontiac dealership in Bethlehem is also getting out of the new car business.
"The cost of inventorying the new cars and then have them sit and not sell doesn't make sense month after month and bear that interest expense," dealership president Gregory Gulick said.
Gulick says it costs hundreds of thousands of dollars a month to keep a lot full of new cars that don't sell or people can't afford or can't meet tough new financing rules. So in the near future, they will only be selling used cars.
"Late model used cars, one or two years old, are about half the price of a new car," Gulick said
Congressman Bob Brady is among the lawmakers who wonder what happened to all that money that was supposed to help the auto industry?
"That doesn't make any sense to me, we gave them the money so that the dealerships could stay open, so people have access to buying cars and get a loan and it's not happening," Congressman Brady said.
Congressman Joe Sestak says the $19-billion given to the auto industry was not enough to provide aide to local dealerships
Congressman Sestak says the House just passed the bill Wednesday to address the problem to keep auto dealerships afloat. The bill is now in the senate where he hopes it will be debated and passed very soon.
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