IG Report: Car dealership closings accelerated job loss

not surprising, but revealing.

[rquoter]IG report says Obama GM, Chrysler moves needlessly accelerated job losses
By: Mark Tapscott
Editorial Page Editor
07/20/10 6:51 AM EDT

A report by the Treasury Department's Special Inspector General for the Toxic Asset Relief Program (SIGTARP) contends that President Obama's push for General Motors and Chrysler to close thousands of dealerships across the country as part of their government bailouts "may have substantially contributed to the shuttering of thousands of small businesses and thereby potentially adding tens of thousands of workers to the already lengthy unemployment rolls, all based on a theory and without sufficient consideration of the decisions' broader economic impacts."

The SIGTARP report further contends, according to Rep. Darrell Issa, the ranking minority member of the House Oversight and Government Reform Committee, that it is questionable whether the closings were "either necessary for the sake of the companies' economic survival or prudent for the nation's economic recovery."

Issa, who has been a vocal critic of the Obama administration's handling of the GM and Chrysler government takeovers, said the SIGTARP report should "serve as a wake-up call as to the implications of politically-orchestrated bailouts and how putting decisions about private enterprise in the hands of political appointees and bureaucrats can lead to costly and unintended consequences."

The California Republican also said the report will say "GM did not consistently follow its stated criteria and that there was little or no documentation of the decision-making process to terminate or retain dealerships with similar profiles, or of the appeals process” and that “making termination decisions with little or no transparency and making a review of many of these decisions impossible…”

You can read the full text of the report here (It's a big pdf, so it may take a bit for it to load). And The New York Times' Nick Bunley has an excellent summary of the report and the background that led to it.[/rquoter]


Read more at the Washington Examiner: http://www.washingtonexaminer.com/o...erated-job-losses-98709459.html#ixzz0uL0q0SbT

and there's this, not unrelated graph:

 

like someone else wrote recently, you have an apparent problem with reading print in pixels. as the report said, the dealership closings may not have been necessary to save these companies.

you need a new smiley: btuse:

 

Oh my.

[rquoter]Race Played Role in Obama Car Dealer Closures

By William Tate
The Obama administration, already under fire for unprecedented allegations of racial bias, faces a new bias claim from a most unlikely source: one of the administration's own inspectors general.

Decisions on which car dealerships to close as part of the auto industry bailout -- closures the Obama administration forced on General Motors and Chrysler -- were based in part on race and gender, according to a report by Troubled Asset Relief Program Special Inspector General Neal M. Barofsky.

[D]ealerships were retained because they were recently appointed, were key wholesale parts dealers, or were minority- or woman-owned dealerships. [Emphasis added.]

Thus, to meet numbers forced on them by the Obama administration, General Motors and Chrysler were forced to shutter other, potentially more viable, dealerships. The livelihood of potentially tens of thousands of families was thus eliminated simply because their dealerships were not minority- or woman-owned.

As has been widely reported, the Inspector General's study skewered the Obama Gang for strong-arming the companies into closing 2,000 dealerships, costing an estimated 100,000 people their jobs during a recession.

But the news media has ignored key elements of Barofsky's report -- elements that are far more damaging, if possible, to Obama. As we reported earlier in the week, a top Obama official, manufacturing czar and "Auto Team" leader Ron Bloom admitted that the dealerships could have been kept open, saving those jobs, "but that doing so would have been inconsistent with the President's mandate for 'shared sacrifice.'"

Barofsky says the administration insisted on the closings even though a GM official told him

that GM would usually save 'not one damn cent' by closing any particular dealership. ... Furthermore, a GM official stated that removing a dealership from the network does not save money for GM -- it might even cost GM money -- and that savings cannot be attributed or assigned to any one dealership.

And a reading of the IG's study makes plain that some dealership closings forced by the administration were based largely on politics.

The report is highly critical of how dealerships were selected for closure, or termination. Barofsky notes that

experts said that while metro areas were oversaturated with GM and Chrysler dealerships and reductions were needed in these areas, this was not the case in rural areas where GM and Chrysler had an advantage over their import competitors. [...]

Although sales volume in small towns may be lower, the cost of operating dealerships in small towns is lower as well. In addition, closing dealerships in small towns could ruin the "historic relationship" that GM has had with residents in small towns and force buyers to drive to metro areas, where there are more competitors. In the worst case, the loss of market share in small and medium-sized markets could "jeopardize the return to profitability" for GM and Chrysler, the (the Center for Automotive Research) representative said. Representatives from the National Automobile Dealers Association also concurred that dealership terminations would cause GM and Chrysler to lose market share in rural areas. [Emphasis added.]

Nevertheless, as Barofsky notes, "ultimately close to half of all of the GM dealerships identified for termination were in rural areas."

That is where raw, hard, sewage-filled Chicago politics came into play.

Records indicate that in 2008, Obama lost the vote totals in the nation's 1,300 rural counties by nearly 80%.

The Obama administration's insistence on radical numbers of closures ended up shuttering dealerships in those rural areas disproportionately, while dealerships and jobs in metro areas -- Obama's geographical base -- were left open.

Additionally, it has been widely theorized that dealers targeted for closure as a result of Obama's interference were predominantly those who donated campaign contributions to Republicans. Although evidence to date is largely anecdotal, given what we've already reported about the Obama administration's handling of the auto bailout, such speculation does have considerable grounds for support.

While that last point is leaves room for debate, the details contained in the Barofsky report are not. As Barofsky points out, the Obama administration was given an advance copy, and "Treasury [the Obama Treasury Department] might not agree with how the audit's conclusions portray the Auto Team's decision making or with the lessons that SIGTARP has drawn from those facts, but it should be made clear that Treasury has not challenged the essential underlying facts upon which those conclusions are based."

Included among those undisputed facts:

-"[D]ealerships were retained because they were ... minority- or woman-owned dealerships";

-Thousands of jobs were lost, unnecessarily, due specifically to Obama's "mandate for shared sacrifice";

-A disproportionate number of Obama-forced closings were of rural dealerships, in areas unfriendly to Obama, even though such closures could "jeopardize the return to profitability" for GM and Chrysler.

The media, of course, remain mute about these serious allegations in the Barofsky report. They have limited their coverage to the job loss numbers and tried to place the blame on Treasury Secretary Turbo-Tax Tim Geithner.

For now.

Before long, we'll be reading that it was somehow Bush's fault.[/rquoter]

http://www.americanthinker.com/2010/07/race_played_role_in_obama_car.html

 

it's not anecdotal evidence, it's taken from the Inspector General's report. your issue is with him, not me or the author of the article.