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

May 15, 2009 |  1:43 pm

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.

Treasury Secretary Timothy Geithner

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

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