U.S. Lawmaker Urges Obama to Help Dealers Cut by Chrysler, GM

A U.S. lawmaker is urging President Obama to reconsider his plan to help save the domestic the auto industry, a plan that the lawmaker said has led ailing General Motors and bankrupt Chrysler to cut 1,889 dealers this week.

Rep. Don Manzullo, R-Ill., sent a letter to Obama on Friday saying this move will put about 150,000 people out of work, undermining the president's goal of reviving manufacturing and creating new jobs.

"I appreciate the enormity of the task your administration has undertaken to help the auto industry," he wrote. "However, I am concerned the auto task force has gone beyond the purview of their mission by forcing the dramatic and accelerated reduction of dealerships."

On Thursday, Chrysler cut 789 of its 3,181 dealers. On Friday, GM told 1,100 dealers, or nearly 20 percent of its U.S. network, that they will be dropped by the automaker late next year because their sales are weak.

Both automakers are scrambling to reorganize and stay afloat in a severe recession that has devastated sales of cars and trucks.

The Obama administration has dictated the terms of reorganizing to the two automakers, which have taken billions in federal loans and are starving for more.

Manzullo said the president's task force is "misguided" in its belief that auto dealerships are dragging down GM and Chrysler, noting that 90 percent of the automakers' revenue comes from the dealers purchasing their cars. He also said none of the members of the task force has ever worked in the auto industry.

"At a time when the national unemployment rate is 8.9 percent ... it is unconscionable for the government to create more job losses for no discernable gains," he wrote.

But the White House said Friday that without the president's effort to save GM and help Chrysler merge with Fiat, all of their dealerships might have closed, at least temporarily.

Gibbs says President Obama "understands the role that a lot of these dealerships play in local communities...and the jobs that are in these dealerships." But, he says, without the White House "you might have seen letters go to all the dealerships ... and the job losses associated with the closing of each and every dealership across the country would have been exponentially greater."

Gibbs refused to speculate whether GM will be able to restructure itself in the two weeks remaining before the government's deadline. He said the negotiations are best left "with the individual stakeholders," and that he didn't want to say something "that gives somebody the ability to change their tactics."

Obama has already criticized GM bondholders for not accepting a compromise they say is far less generous than one the United Auto Workers was offered.

Manzullo introduced a bill earlier this year that would give Americans a $5,000 voucher to purchase a new vehicle. The bill is pending in committee.

FOX News' Wendell Goler contributed to this report.