A strong and profitable dealer network at General Motors can provide top customer service and enhance the image of GM's four remaining brands. That is according to Michael J. Robinson, GM's vice president and general counsel of North America. Robinson made his remarks July 22 in testimony to the U.S House of Representatives Subcommittee on Commercial and Administrative Law, Committee on The Judiciary. Robinson acknowledged that "virtually every knowledgeable observer of the automotive industry" has stated that General Motors had too many dealers, and that GM needed "dramatic restructuring" to remain viable.

Robinson also discussed the reasoning behind the restructuring. At a time of "substantial dislocation" in the credit, housing and other markets around September 2008, the demand for vehicles in the U.S. fell to levels not seen since World War II, he stated. If not for loans to General Motors from the U.S. treasury in December 2008, GM would have had no option but to liquidate the company, with catastrophic impact upon its employees, dealers, suppliers, and the national economy as a whole, he explained.

Because of the government loans, GM was able to preserve and enhance the value of its assets, which substantially benefitted the national economy and all of the economic stakeholders. "In short, the system worked," Robinson testified. "We are grateful to the government for its assistance."

To read Robinson's full testimony, click here.