Remember when the auto industry was in a free fall in late 2008?
Remember what nearly everyone in and out of the auto industry said about the domestic auto makers having too many poor performing dealerships around the country?
I remember how many dealers told me off camera, "Of course there are too many of us out here selling Chevy, or Ford, or Chrysler." I also remember how many would also say, "Hey, if we close the bad dealers, business for everyone will be better."
I bring both of these up as a reality check to keep in mind as the Special Inspector General for the Troubled Asset Relief Program (SIGTARP) releases an entitled: “Factors Affecting the Decisions of General Motors and Chrysler to Reduce Their Dealership Networks."
The audit conclusion: it is unclear if the Obama Administration’s push for accelerated dealership closings mandated by the auto bailout of General Motors and Chrysler “was either necessary for the sake of the companies’ economic survival or prudent for the sake of the Nation’s economic recovery”.
In addition, the audit found, “Treasury made a series of decisions that may have substantially contributed to the accelerated 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 impact.”
Let's put this in simple terms: The auditor doesn't think President Obama's Auto Task Force should have forced GM and Chrysler to close so many dealerships and those closings contributed to thousands of jobs being needlessly lost.
Whether or not you agree with this conclusion, make no mistake GM and Chrysler did need to be restructured. If they weren't, one or both would have gone away for good or wound up broken into pieces.