Rush to Auto Bankruptcy Criticized

A House Judiciary Committee hearing Thursday on automaker bankruptcies became a gripe session, focused on complaints about their rapid pace, bankruptcy court practices and the proposed shutdown of some minority-owned dealerships.

Both Democratic and Republican legislators disapproved of the Obama administration's effort to move quickly to force Chrysler and General Motors (GM Quote) to restructure or seek bankruptcy court protection.

Chrysler filed on April 30, and GM faces a June 1 deadline, with a filing widely anticipated.

Seeking to ease the concerns, committee chairman John Conyers (D., Mich.), suggested, "Why don't we rush into 1600 Pennsylvania Avenue and get this thing worked out, and bring a bipartisan delegation?" He said a meeting with administration officials could occur as early as Friday.

Every manner of objection to the bankruptcies was raised by a panel that included minority dealers, bankruptcy experts and leaders of interest groups, including consumer advocate Ralph Nader, who pointed out that many jobs would be lost if GM downsizes. He told members of Congress that their authority was being usurped.

The pleas of minority dealers, who said they were being unfairly targeted, garnered the strongest congressional reaction. "I am here for one reason, the lack of appreciation, the negative impact, the seemingly pointed impact, on automobile dealers and particularly minority automobile dealers," said Rep. Shelia Jackson Lee (D., Texas). Added Rep. Maxine Waters (D., Calif.): "We may have a role to play in all of this, negotiating with this administration about what they're going to do to ease the pain on these dealers."