Last year, while the Obama administration seized two of the nation’s three main domestic auto manufacturers, it also shut down thousands of dealerships across the country, supposedly to stabilize GM and Chrysler. A new report from Neil Barofsky, the Inspector General of the TARP program, calls into question that decision. In a sharp rebuke to the White House, Barofsky says that the action needlessly cost tens of thousands of jobs and extended an already-disastrous downturn in employment:
President Obama’s auto task force pressed General Motors and Chrysler to close scores of dealerships without adequately considering the jobs that would be lost or having a firm idea of the cost savings that would be achieved, an audit of the process has concluded.
The report by Neil M. Barofsky, the special inspector general for the Troubled Asset Relief Program of the Treasury Department, said both carmakers needed to shut down some underperforming dealerships. But it questioned whether the cuts should have been made so quickly, particularly during a recession. The report, released on Sunday, estimated that tens of thousands of jobs were lost as a result.
“It is not at all clear that the greatly accelerated pace of the dealership closings during one of the most severe economic downturns in our nation’s history was either necessary for the sake of the companies’ economic survival or prudent for the sake of the nation’s economic recovery,” the report said.
Moe Lane gives you
The short version? Having the government do your restructuring for you isn’t necessarily the brightest thing in the world. Particularly when there’s a variety of conflicting objectives. At least, if what you’re trying to do is actually create a better version of your company; if your goal is to use government fiat to streamline the operations of your newly government-owned automobile manufacturer it apparently works out just fine.
It’s all about incompetence; you mean to tell me that having two guys in charge whose entire automotive industry was driving a car, and being a union negotiator, wouldn’t work? Who’d have thunk it!
Speaking of jobs, Caroline Baum notes that Obama Omits Jobs Killed or Thwarted from Tally
“If the administration wants to take credit for ‘jobs created or saved,’ it should also accept responsibility for ’jobs destroyed or prevented,’” said Bill Dunkelberg, chief economist at the National Federation of Independent Business.
That would mean accepting responsibility, which they are not about to do.