A Letter from ACRA to the U.S. Senate and House of Representatives

This letter was sent on Dec. 8 by the American Car Rental Association (ACRA) to the Honorable Harry Reid and the Honorable Mitch McConnell of the U.S. Senate, as well as the Honorable Nancy Pelosi and the Honorable John Boehner of the U.S. House of Representatives.

We recognize Congress is working diligently to address the crisis facing the Big 3 legacy auto manufacturers and we believe that it is important that our voice be heard on this matter, as collectively our industry represents the largest single customer of General Motors, Ford and Chrysler.

It is not our place to discuss the type of program you consider for development, but it is important for us to explain to you what is needed in this plan to not only preserve the American automobile industry, but to protect the thousands and thousands of jobs that also exist in the car rental industry by our members, including the suppliers to all of our companies.

We represent not only some of the largest and most recognizable brands in car rental, but we also represent the mom and pop local dealer than rents five cars in his small suburban town. ALL of us are currently feeling the pain of this financial situation.

We need Detroit to be strong. We need to have their product. We are not only the largest consumer of their product, but we are also a fertile test ground for their vehicles to be used to determine consumer demand and also for product testing and planning. It is critical, from our perspective, that you consider all of these issues as it relates to the survival of the Big 3. However, what has yet to be discussed in any of the testimony I personally have heard to date is the most critical issue facing not only our industry, but also the retail dealers and the underlying consumer: the lack of available financing to purchase cars from these manufacturers.

If this issue is not addressed, it is clear that the plan you are considering cannot be successful. In respect to the car rental companies, GMAC, Ford Motor Credit, Chrysler Financial, GE Credit, and ALL of the large regional banks have either cut back or have completely pulled out of the credit market to finance vehicle acquisitions. Certain rental companies have had ALL of their credit lines pulled. One of the publicly held firms has announced they will not be purchasing any vehicles until late in the first or possibly second calendar quarter. We all would welcome the opportunity to assist the Big 3 and help our industry and the auto manufacturing industry, but we simply cannot. We do not have the ability to do so in the long term.

The credit crisis in the automobile industry is in a state of emergency. The manufacturers are calling all of us and offering good products and attractive pricing, but we simply do not have the ability to acquire fleet from them. Our industry is being paralyzed by the current situation.

We are all cutting back staff. Every single car rental company has experienced a reduction in force. Our suppliers, many of which rely on the car rental industry for survival, are all suffering as well. Many have already gone out of business. This trickle-down effect of the problems we are all experiencing have devastated not only the value of the publicly held companies, but also the survival of the independent operator or the small business owner who is a franchisee or affiliate of one of the major brands.

The task before Congress is monumental. We all recognize that. We encourage you to find a way to preserve our American manufacturing industry. We want to help Congress and our employees, vendors and customers as well. To do so, as part of any rescue plan that is ultimately put in place, we need your help in making sure the credit facilities needed to purchase the products of these manufacturers exist or the vehicles of the Big 3 cannot be ultimately sold.

Respectfully submitted,
Robert M. Barton, President
American Car Rental Association

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