Everything you need to know about the nightmare of government-controlled businesses can be found in a damning new inspector general’s report on Dealergate. The independent review of how and why the Obama administration forced Chrysler and General Motors to oversee mass closures of car dealerships across the country reveals grisly incompetence, fatal bureaucratic hubris and Big Labor cronyism. No wonder you won’t hear much about the report’s in-depth details in the so-called mainstream media.
Under the guise of “saving” the American auto industry through a bipartisan, taxpayer-funded bailout now topping $80 billion, President Obama’s know-nothing bureaucrats pushed the car companies to eliminate thousands of jobs — with unjustified haste using dubious economic models.
Obama ordered the bailout recipients to “prove” their long-term viability by submitting restructuring plans. But White House and Treasury Department “experts” rejected the auto manufacturers’ proposals, citing the too-slow pace of their plans to reduce their dealership networks over a period of five years. Once the auto companies modified those plans to meet government-backed timelines, the money flowed.
But Neil Barofsky, the federal watchdog overseeing the bank-auto-insurance-all-purpose bailout fund, found that the White House auto industry task force and the Treasury Department “Auto Team” had no basis for ordering the expedited car dealership closure schedules. They relied on a single consulting firm’s internal report recommending that the U.S. companies adopt foreign auto industry models to increase profits — a recommendation hotly disputed by auto experts who questioned whether foreign practices could be applied to domestic American dealership networks.
Team Obama’s government auto mechanics also ignored the economic impact of rushing those closures. According to Barofsky, they discounted counter-testimony from industry officials that “closing dealerships in an environment already disrupted by the recession could result in an even greater crisis in sales.”
The inspector general also noted that “it is clear that tens of thousands of dealership jobs were immediately put in jeopardy as a result of the terminations by GM and Chrysler.” After extensive investigation, the watchdog concluded that “the acceleration of dealership closings was not done with any explicit cost savings to the manufacturers in mind.” Only after Capitol Hill critics — both Republican and Democrat — started questioning the Dealergate decisions did Obama’s auto “experts” come up with market studies and estimated job loss data to assess the impact of their reckless, arbitrary orders.
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So this is how its going to be? Obama is going to make sure that we all feel the same amount of pain…..how nice. Well at least he is fair.
And you thought there was no way this guy was a communist. Nobody is a communist in this day and age. Really?
Many of hussein's auto panel also come from the 'environmental' movement, with no industry experience. They've had to rehire some of the execs they fired because nobody they could find begin to do their jobs, but the unqualified and incompetent fools are still the ones in charge overall. If things keep going like this we can expect GM and Chrysler to become federal dependents, existing as long as DC can borrow money, but never turning a profit.
This is just the beginning. Since the new financial regulations were made law a few days ago, the W.H. is now able to tell a bank to do certain things it wants done or they will take them over. So, being judicious, the bank will capitulate. Just watch the plays made to further destroy this country. If it wasn't so tragic it would be fun to watch – in a movie – like a big game of monopoly with the Gov. being the owner of all it wants.
The worst possible financial position for a country to be in is were the government and its political lackies can dictate to businesses how to conduct their business.
I drove down to Houston on Interstate 45 and went past what was the former largest Cheverolet dealer in North America and it is 100% vacated. GM has no one to blame but themselves. the government should have let them fail and go bankrupt.
yeah…deep investigation will show he didn't support the current admin with dollars; that he supported Hillary, or the Republicans…thus he got the ax…only supporters kept their franchises…
In 2009 there were some stories about how democrat=owned dealerships were saved and those owned by republican contributors were closed, and even GIVEN to cronies. What's up with that or has it been debunked?
The absolute worse part about this was transferring corporate bondholder's investment over to the union. Where did they get the power to abrogate contracts and buy bonds for 10 cents on the dollar, by force?
Which would explain why some very profitable dealerships were closed. If a dealership is profitable then it is selling cars and makes no sense to close it without damaging the manufacturer whom you are trying to save. Many dealerships that closed were privately owned and very profitable. I'm sure GM and Chrylser were not selling cars to them at a loss.
The beginnings of tyranny, pure and simple. And people's lives are already adversely affected. Great piece, Michelle.
There was an article in Forbes magazine a couple of years ago about GM having too many dealerships. GM has wanted for a long time to close down at least a third of their dealerships but state laws either make it prohibitively expensive. What if the reason for the rush to close dealerships was to get around these state franchise laws by using the bankruptcy law. Remember, it is easier to re-open a dealership than to close it.
Thanks for the good writeup. It if truth be told was a amusement account it. Look complicated to far introduced agreeable from you! However, how could we communicate?