U.S. Senate Commerce chair seeks GM/Chrysler audit

WASHINGTON (Reuters) - Congress turned up the heat on General Motors Corp and Chrysler Group with a senior lawmaker calling for a U.S. Treasury Department review of decisions to cut more than 2,000 dealers.

Senator John Rockefeller, chairman of the Commerce Committee, asked on Friday for the internal watchdog of the agency's financial bailout fund to look into the matter.

"There is substantial confusion, even among dealers themselves, as to how GM and Chrysler selected dealerships to terminate and what benefits, if any, they might gain by doing so," the Democrat from West Virginia said in a letter to Neil Barofsky, special inspector general of the Troubled Asset Relief Program (TARP).

Last week, the House Financial Services Committee approved a resolution that would require the Obama administration's autos task force to turn over documents on dealer decisions and other matters related to the automakers' bankruptcies. That proposal requires approval of the full House of Representatives.

The task force, which is a unit of the Treasury Department, has provided more than $60 billion in bailout financing from the TARP fund for GM and Chrysler.

Chrysler has terminated 789 dealer franchises while GM plans to stop doing business with 1,300 showrooms in 2010 to streamline sales and save money.

Hundreds of dealers assert their rights were trampled during the Chrysler and GM bankruptcies, leaving them with little or no legal recourse.

Dealer groups say more than 150,000 jobs are at stake, a figure that resonates with lawmakers eager to prevent layoffs in a recession where joblessness nationwide is approaching 10 percent. Auto sector employment has been hit particularly hard due to severe contraction at GM and Chrysler and downsizing at Ford Motor Co, plus bankruptcies at suppliers.

Legislation approved by the House and now before the Senate would require GM and Chrysler to restore dealer franchise rights. The legislation's fate is uncertain with the White House strongly opposed to the measure.

A senior Chrysler executive said this week the company, now operating in an alliance with Italy's Fiat, again could face the prospect of liquidation if the dealer measure is approved.

(Reporting by John Crawley; Editing by Tim Dobbyn)