The chief executives of auto giants General Motors and Chrysler told the Congress on Wednesday slashing dealer networks was critical to their companies' survival, Xinhua reported.
"We have no choice. We're all being called to sacrifice in order to build a stronger more viable GM," the company's Chief Executive Officer Fritz Henderson said in testimony prepared for a Senate Commerce Committee hearing.
GM, which filed for bankruptcy on Monday, plans to close about a combined 1,600 dealerships.
"This is our last chance to get it right, to fix permanently those parts of the business that have diverted us from consistently building winning cars and trucks and the consumer experience to match," said Henderson.
Jim Press, Chrysler's president, also told lawmakers that a quick turnaround of its dealer network was crucial for its success.
"Today's automotive industry cannot support the number of dealers currently in the marketplace," Press said. "There's not enough business for the number of dealers Chrysler has today, given that we have less than two-thirds of our former sales volume. "
Chrysler plans to close 789 dealerships by June 9.
Meanwhile, lawmakers expressed concerns that the cuts will put thousands of people out of work.
"I don't believe that companies should be allowed to take taxpayer funds for a bailout and then leave local dealers and their customers to fend for themselves with no real notice and no real help," said the Senate Commerce Committee Chairman Jay Rockefeller. "That is just plain wrong."