GM, Chrysler defend 3,000 dealership cuts

“This is a painful process that spares no particular group,’’ Michael Robinson, General Motors Co.’s vice president and general counsel, said to critics in Congress.

Chrysler warned that a House-approved plan to reinstate dealers shuttered by the bankruptcies threatened their new partnership with Italian automaker Fiat Group SpA.

Louann Van Der Wiele, Chrysler’s vice president and associate general counsel, said the restoration of nearly 800 shuttered dealers would “simply take Chrysler back to the future that [the old company] faced not long ago, without the option of a purchaser for substantially all of its assets.’’

In the second day of congressional hearings, lawyers for GM and Chrysler said the dealership closings were among the traumatic but necessary concessions from unions, bondholders, and retirees needed in the swift bankruptcies. The only alternative, they said, was liquidation and massive job losses.

But lawmakers said hundreds of profitable dealerships received little warning of the closings, accusing the companies of turning their back on dealers and the communities they serve after receiving billions in federal aid.

“In the blink of an eye, American icons were turned into American tragedies,’’ said Representative Trent Franks, Republican of Arizona.

Several auto dealers told the panel how the auto industry decisions were wrecking their lives. Auto dealers estimate that nearly 200,000 jobs could be lost in the dealer consolidation.

“If my dealership is not restored, we will lose everything - including college savings for my children - and my home,’’ said Jim Tarbox, a former Chrysler dealer from North Kingstown, R.I.

The House approved a measure last week that would force GM and Chrysler to restore the dealers expected to be shuttered by late 2010.

The Senate has not yet considered the plan.