Dealership closures too fast, too soon?

A car pulls into a Buick dealership in DeKalb, Ill. The dealership is set to have its business relationship discontinued with GM.


Kai Ryssdal: It's been a little over a year now since General Motors and Chrysler made their way out from their speedy bankruptcy proceedings. In all the push to trim down and cut costs last year, the White House pushed both automakers to shut down dozens and dozens of dealerships. That decision is the subject of a new report from the TARP inspector general this morning -- the guy who's job it is too keep an eye on the Troubled Asset Relief Package, the bank and car company bailout package. The report says closing the dealerships may have been right. The way it happened was all wrong, though, and cost the economy jobs and confidence.

Marketplace Alisa Roth reports.

Alisa Roth: When GM and Chrysler decided which dealerships to shut down, they looked at factors like how many other dealerships there were in an area and how many cars they were selling.

Kim Hill works at the Center for Automotive Research where he looks at the relationship between communities and the auto industry. He says there should have been a lot more to the equation.

Kim Hill: There's this whole issue of how these dealers more broadly impact the local region. There's a public side to the role the dealership plays in a community.

Car dealers really are often big employers, especially in rural communities. And there are always big multiplier effects: They hire building contractors, cleaners. Their employees spend money in communities.

Michael Smitka is an economics professor at Washington and Lee University. He says the car dealer business has been getting smaller for decades. And rather than forcing dealerships to close, they could've just let the attrition continue.

Michael Smitka: Letting nature take its course would have been a much better way of handling it.

The Barofsky report says the government should've found a way to let more dealers survive, or at least hang on for longer. Smitka says that misses the point.

Smitka: From my perspective, the number of dealerships that can make money selling GM vehicles sounds like a good number of dealerships to me.

The Treasury Department says it had to act, and quickly. If Chrysler and GM had gone under, the economy would've lost hundreds of thousands of jobs across multiple industries. And though there might be criticism of the technique, one thing is true: Both GM and Chrysler emerged from bankruptcy as stronger companies.

I'm Alisa Roth for Marketplace.

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I think we can tie this into how Obama a secret Muslim, was able to take power for Al Qaeda. What a right win nut rant. The fact is that there where way way to many dealerships. Though harsh, the change will help the others, and make the company better compete with foreign companies that are kicking American auto companies back and forth. The big three, is just now starting to make better cars. Lets hope the trend continues.

Kai - interesting story but you didn't mention a recent article in the NYT that said discount grocery chains are buying closed dealerships because they have the floorspace, parking, and customers. Possible solutions.

Are you kidding me. You do a story about closing Chrysler dealerships and BO's role and you don't mention this:Chrysler's Railroad

This could be a scandal of epic proportions and one that makes Nixon's
Watergate or Clinton 's Monica Lewinsky affair pale by comparison. Why
was there neither rhyme nor reason as to which dealerships of the Chrysler
Corporation were to be closed?

Roll the clock back to the weeks just before Chrysler declared bankruptcy. Chrysler,
like GM, was in dire financial straits and federal government "graciously" offered
to "buy the company" and keep them out of bankruptcy and "save jobs."
Chrysler was, in the words of Obama and his administration,
"Too big to fail," same story with GM.

The feds organized their "Automotive Task Force" to fix Chrysler and GM. Obama,
in an act that is 100% unconstitutional, appointed a guy named Steve Rattner
to be the White House's official Car Czar - literally, that's what his title is.
Rattner is the liaison between Obama, Chrysler, and GM.

Initially, the national media reported that Chrysler 'had made this list of dealerships'. Not true!

The Washington Examiner, Newsmax, Fox New and a host of other news agencies
discovered that the list of dealerships was put together by the "Automotive Task
Force" headed by no one other than Mr. Steve Rattner.

Now the plot thickens.
Remember earlier we said that there was neither rhyme nor reason why certain
dealerships were closed?

Actually there's a very interesting pattern as to who was closed down. Again,
on May 27, 2009, The Washington Examiner and Newsmax exposed the connection.
Amazingly, of the 789 dealerships closed by the federal government, 788
had donated money, exclusively to Republican political causes, while contributing
nothing to Democratic political causes. The only "Democratic" dealership on the
list was found to have donated $7,700 to Hillary's campaign, and a bit over $2,000 to
John Edwards. This same dealership, reportedly, also gave $200.00 to Obama's campaign.

Does that seem a little odd to you?

Steve Rattner is the guy who put the list together. Well, he happens to
be married to a Maureen White.

Maureen happens to be the former national finance chairman of the Democratic
National Committee. As such, she has access to campaign donation records from
everyone in the nation- Republican or Democrat. But of course, this is
just a wacky "coincidence," we're certain.

Then comes another really wacky "coincidence."

On that list of dealerships
being closed down, a weird thing happened in Arkansas , North Louisiana , and
Southern Missouri. It seems that Bill Clinton's former White House Chief
of Staff, Mack McClarty, owns a chain of dealership in that region, partnered
with a fellow by the name of Robert Johnson. Johnson happens to be founder of Black Entertainment Television and was a huge Obama supporter and financier.

These guys own a half dozen Chrysler stores under the company title of
RLJ-McClarty-Landers. Interestingly, none of their dealerships
were ordered closed - not one!

While all of their competing Chrysler/Dodge and Jeep dealership were!
Eight dealerships located near the dealerships owned by McClarty and Johnson
were ordered shut down.

Thus by pure luck, these two major Obama supporters now have virtual
MONOPOLY on Chrysler sales in their zone. Isn't that amazing?

Go look in The Washington Examiner, the story's there, and it's in a dozen
or so other web-based news organizations; this isn't being made up.

Now if you thought Chrysler was owned by Fiat, you are mistaken. Under
the federal court ruling, 65% of Chrysler is now owned by the federal
government and the United Auto Workers union!
Fiat owns 20%.
The other 15% is still privately owned and presumably will be traded
on the stock market. Obama smiles and says he doesn't want to run the auto industry.

As horrifying as this is to comprehend, and being as how this used to
be the United States of America , it would appear that the president has the
power to destroy private businesses and eliminate upwards of 100,000 jobs
just because they don't agree with his political agenda.

This is stuff you see on the news happening in other countries where there are DICTATORS, and it's happening right here, right now, in our back yard.
There are voices in Washington demanding an explanation, but the "Automotive
Task Force" has released no information to the public or to any of the senators
Demanding answers for what has been done.

Keep your ear to the ground for more on this story. If you've ever wanted to
make a difference about anything in your life, get on the phone to your
national senator or representative in the House and demand an investigation into this.

Benjamin Franklin had it right when he said, "All that's necessary for evil to triumph is for good men to do nothing."
Car Czar No More

An amazing thing happened as this story was going to press. Obama's Car Czar,
Steve Rattner, resigned on July 13 and was promptly replaced by former
steel workers union boss Ron Bloom.

According to CBS News, Rattner left "to return to private life and
spend time with his family."

Treasury Secretary Tim Geithner said, "I hope that he takes another opportunity
to bring his unique skills to government service in the future."

By the way, Rattner is under investigation for a multi-million dollar
pay-to-play investment bank scandal in New York ...
But, we're certain that had nothing to do with his resignation.
And, according to several news sources out there, there are rumors he's being
investigated for what could be pay-to-play scandal involving the closing of
Chrysler and GM dealerships. Really? Again, that couldn't have anything
to with his resignation-that's ridiculous! Like CBS said, this guy just
wants to "spend more quality time with his family."

Obama has 32 personally appointed "czars" who answer to no one but
him, all of whom are acting without any Constitutional authority.
But hey, we're sure they all have "unique skills,"......as Tim Geithner likes to say!
IF!! any part of this is true and you've ignored it you are not journalists / just Butt kissers I want all the facts on both sides of the isue good or bad, like it or not


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