Treasury to euthanized GM and Chrysler dealers: It wasn't us

Advice to all General Motors dealers: If the phone rings today and Caller ID shows the 313 area code, don't answer.

It's likely GM's Detroit headquarters calling to can you. GM is informing 20% of its dealerships all across the U.S. of A. -- about 1,100 Pontiac, Chevy, GMC, Buick and Cadillac dealers, that they're losing their affiliations. Chrysler did the same on Thursday to 789 of its 3,200 dealers. Part of the forced reorganizations by the Obama administration.

Now some people will smile smugly because back in high school it was the rich kids of those very car dealers who got shiny new cars every year. But fact is, these moves will likely mean joblessness for some 101,000 dealer employees. Plus many others in associated suppliers.

Presumably, since these positions will have been lost, they'll be added to the 3.5 million jobs the Obama administration will save or create.

Anyway, perhaps anticipating some antipathy toward the federal government's rapidly increasing control of the rapidly shrinking American automotive industry, the Treasury Department issued one of those unsigned it-could-actually-have-been-worse and would-you-believe-this-is-actually-good-news statements that won't buy anybody any groceries but look good on paper.

Gee, now why wouldn't Secretary Geithner want his name on this release? Well, here's his photo anyway. And the statement in full:

Today, General Motors initiated the dealer consolidation plan it laid out in its interim plan on April 27, 2009.

GM’s announcement is part of the company’s larger effort to restructure to achieve financial viability. The Task Force is continuing to work with GM and all its stakeholders and will stand behind GM during this process to ensure that it emerges as a more competitive, viable business in the long-term.

As was the case with Chrysler’s dealer consolidation plan, the Task Force was not involved in deciding which dealers, or how many dealers, were part of GM’s announcement today.  

As difficult as these announcements are for the dealers that will no longer be selling GM and Chrysler cars and the communities in which they operate, without the President’s intervention, the entire GM and Chrysler dealer networks could have been lost.

The Administration’s commitment to this industry has given both companies a new lease on life. By supporting a restructuring that results in stronger car companies – supported by efficient and effective dealer networks – this process will not only provide more stability and certainty for current employees but the prospect for future employment growth.

In addition, the Administration is committed to continuing its significant efforts to help ensure that financing is available to creditworthy dealers and to pursuing efforts to help boost domestic demand for cars. These steps will help auto dealers, the auto industry and the American economy.

-- Andrew Malcolm

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Photo: Joe Tabacca / Bloomberg News

Comments

[luvwknd]

How will less dealerships result in more car sales when GM and Chrysler have already alienated the American consumers?

Respect your investment and buy NON-AMERICAN vehicles!

[Joeylynne]

I am sure that that it is much easier to blame the Obama administration than the car company and its greedy executives.

[Norris Hall]

Part of the blame goes to the bad economy.
People who would normally buy a car are holding back on spending.
The other part of the problem is GM itself.
For years it depended on big powerful SUV's and trucks.
It resisted any government efforts to mandate better fleet fuel standards, instead relying on the market.
We'll now the market has spoken.
We think GM's gas guzzlers stink.
We think they should take those gas guzzlers and stick them where the sun doesn't shine.
The free market is working....but not for GM

[Either way]

Either way what was the point of spending billions and billions on them if they were going to declare bankruptcy anyway?
Nice use of tax payer money there.... I want some real change called real life, wake up politicians money doesnt grow on trees

[Tom Williams]

So Obama is responsible for Bush's economy. Obama is bad for government intervention. Obama is bad for not enough government intervention. Do you people sit there gnawing on your own leg while you write this tripe?

[Larry Clifton]

Obama is truly a national nightmare, a worst dream come true.

[Pom Pom Girl]

THe Democrats have totally screwed over the UAW! Awesome.

[Pom Pom Girl]

Treasury, President, Auto Czars etc, none have auto experience and they are running the car companies. If that isn't socialism I don't know what is.

[Pom Pom Girl]

inexperienced fools in the white house. scary to think they have the hubris to attempt to reinvent our economy

[Windfall]

Have the geniuses in Washington figured out how having less dealers is going to result in Detroit selling more cars?

The dealers are independent contractors. They don't get a draw. It costs Detroit nothing to let them keep selling cars. So where is the rational for closing them down?

Does Urkelama have a clue?

[Pom Pom Girl]

FDR brought us the Social Security System that is basically a pyramid scheme that only worked if we continued to exponentially boom our population or raise the retirement age to that equal to the life expectancy. This wonderful system is about to kill us economically and we have socialist principles to thank for it.
FDR brought us the socialist program of Fannie Mae and Freddie Mac to provide loans for homes to those who were not eligible in the free market. LBJ then privatized these entities in 1968 and Democrats in general fought regulation at every turn. It is this very program that has come near to sinking the entire world into the next Depression and for this we have Socialism to thank.

Barack Obama wants to bring more socialist programs and an us versus them share the wealth tax punishment system to America. Forgive me if I cringe at what decades long time bombs the Obama Socialist agenda will lay for my grandkids, children and I.