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TARP Audit Questions Rush to Close Auto Dealers

apdst

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You mean, closing a buncha car dealers, whilst trying to prop-up the auto industry wasn't a good idea?!? No way!!!!!!

Is Obama just a dumbass, or is he ****ing things up on purpose? Those are really the only two options.

DETROIT — 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.
 

dontworrybehappy

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I don't want to give them a reason to discredit your report so here is the link:

http://www.nytimes.com/2010/07/19/business/19autos.html?src=busln

And the new york times too, ouch, that takes away the lefts biggest bombshells, that it's a "right wing website" so they can discredit it without having to actually confront the issue. Not this time!

I can't wait to see how they try to crawfish out of this one. Or will they finally admit Obama is the biggest ****up this nation has ever seen?

Stay tuned to find out!
 
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Lord Tammerlain

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I don't want to give them a reason to discredit your report so here is the link:

http://www.nytimes.com/2010/07/19/business/19autos.html?src=busln

And the new york times too, ouch, that takes away the lefts biggest bombshells, that it's a "right wing website" so they can discredit it without having to actually confront the issue. Not this time!

I can't wait to see how they try to crawfish out of this one. Or will they finally admit Obama is the biggest ****up this nation has ever seen?

Stay tuned to find out!
Check the breaking news section

GM and Chyrsler were closing dealerships before the crisis and would have liked to close more before, but could afford it. The bankruptcy allowed them to break contracts and close the ones they wanted without financial penalty.

Unless you like having government money support unproductive workers at car dealerships, this was a good move
 

Ockham

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Check the breaking news section

GM and Chyrsler were closing dealerships before the crisis and would have liked to close more before, but could afford it. The bankruptcy allowed them to break contracts and close the ones they wanted without financial penalty.

Unless you like having government money support unproductive workers at car dealerships, this was a good move
So putting people out of work during an economic down turn is a good move huh? Is that so they can become dependent on extended unemployment benefits or was there some other benefit I'm missing?
 

roughdraft274

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So putting people out of work during an economic down turn is a good move huh? Is that so they can become dependent on extended unemployment benefits or was there some other benefit I'm missing?
The whole move was to prevent a bankruptcy of GM and Chrysler. It worked. :shrug:
 

Ockham

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The whole move was to prevent a bankruptcy of GM and Chrysler. It worked. :shrug:
The government take over of GM and Chrysler is what prevented the bankruptcy - not the premature closing of dealerships. As the saying goes; "Money talks, bull**** walks". Government ponied up the money, took controlling share and used tax dollars to do it. I see nothing that suggests closing dealerships prevented the bankruptcy. Please post the information that proves your conclusion - as I'd like to read it.
 

roughdraft274

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The government take over of GM and Chrysler is what prevented the bankruptcy - not the premature closing of dealerships. As the saying goes; "Money talks, bull**** walks". Government ponied up the money, took controlling share and used tax dollars to do it. I see nothing that suggests closing dealerships prevented the bankruptcy. Please post the information that proves your conclusion - as I'd like to read it.
They're overall goal was to make GM profitable and competitive. They've succeeded in my opinion, and I didn't think they would. People are trying to make this a bigger deal than this really is. From the source you posted:
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,
This was something that was needed. It sucks that those people lost they're jobs, but they were going to lose them anyway and potentially if they didn't do this many more would lose they're jobs.

They did what was needed and prudent. To bash the president because a report is claiming "well maybe it would have been better to wait a few months and then close the dealerships down" is silly. Even the report says that this needed to be done.

EDIT: Sorry, i meant from the original article, not from the source you posted. My mistake.
 

Objective Voice

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Issue has already been discussed (or is being discussed) over in this thread.

Actually, GM still went into banruptcy, just Chapter 11 which allowed them to restructure their debts vice Chapter 7 which would have forced them to close their doors.

The point here is the government didn't force GM or Chrysler to close these dealerships, and if people would take just alittle bit of time to review the facts of the matter what they'd learn is that the government actually reduced the number of dealerships these auto companies were trying to close! So, as much a folks would like to think this is all the government's fault, the reality is they saved GM/Chrysler jobs while giving them a "loan" to keep an American auto company solvent which allowed them to restructure and remain competitive. ALOT more jobs would have been lost otherwise.
 
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Ockham

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They're overall goal was to make GM profitable and competitive. They've succeeded in my opinion, and I didn't think they would. People are trying to make this a bigger deal than this really is. From the source you posted:

This was something that was needed. It sucks that those people lost they're jobs, but they were going to lose them anyway and potentially if they didn't do this many more would lose they're jobs.

They did what was needed and prudent. To bash the president because a report is claiming "well maybe it would have been better to wait a few months and then close the dealerships down" is silly. Even the report says that this needed to be done.

EDIT: Sorry, i meant from the original article, not from the source you posted. My mistake.
Sokay. But nothing you posted proves the closing of dealerships prevented the bankruptcy.
 

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Actually, GM still went into banruptcy, just Chapter 11 which allowed them to restructure their debts vice Chapter 7 which would have forced them to close their doors.

The point here is the government didn't force GM or Chrysler to close these dealerships, and if people would take just alittle bit of time to review the facts of the matter what they'd learn is that the government actually reduced the number of dealerships these auto companies were trying to close! So, as much a folks would like to think this is all the government's fault, the reality is they saved GM/Chrysler jobs while giving them a "loan" to keep an American auto company solvent which allowed them to restructure and remain competitive.
Who isn't my point - that they were closed hurt the job market and put more people than was needed out of work, is my point. In retrospect - those dealerships may still have closed AFTER or during the bankruptcy process, that doesn't mean those that closed earlier was a good idea. And I don't know all the facts as to what the government did or did not influence with these closings. Is there some Government memo's out or statements from GM stating the Fed didn't tell them to close these dealerships?
 

roughdraft274

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Sokay. But nothing you posted proves the closing of dealerships prevented the bankruptcy.
You're getting desperate on this one dude. The report that the conservatives on here are holding high said that thses cuts were needed. GM and Chrysler were already planning them to save money.

It's possible that maybe they could have been fine if they had waited alittle longer to close the dealerships down, but hindsight is 20/20 and this was going to happen eventually, as well as that the longer they waited the more money they lose and the more tax dollars they would need in assistance..

As objective voice pointed out, they didn't even close down as many as GM and Chrysler originally wanted to.

What is your complaint here? Exactly how do you think this should have been handled?
 

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You're getting desperate on this one dude. The report that the conservatives on here are holding high said that thses cuts were needed. GM and Chrysler were already planning them to save money.
What report - can you direct me to something ?

It's possible that maybe they could have been fine if they had waited alittle longer to close the dealerships down, but hindsight is 20/20 and this was going to happen eventually, as well as that the longer they waited the more money they lose and the more tax dollars they would need in assistance..
Sure it's possible... but I don't know that it would have happened eventually. What information do you have that leads you to that conclusion?

As objective voice pointed out, they didn't even close down as many as GM and Chrysler originally wanted to.
Who's "they"? Chrysler, the Fed or the person put in charge of the bankruptcy?

What is your complaint here? Exactly how do you think this should have been handled?
I guess my complaint is you and OV have such clear understanding and nod your heads that these closings were inevitable, required, and would have happened anyway. I just don't see it ... maybe you can help educate me as to what leads you to those conclusions. Everything I've read doesn't... :shrug:
 

justabubba

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Who isn't my point - that they were closed hurt the job market and put more people than was needed out of work, is my point. In retrospect - those dealerships may still have closed AFTER or during the bankruptcy process, that doesn't mean those that closed earlier was a good idea. And I don't know all the facts as to what the government did or did not influence with these closings. Is there some Government memo's out or statements from GM stating the Fed didn't tell them to close these dealerships?
so, let me see if i understand what your position actually is
you are critical of Obama because he did not loan more money to the auto makers so that they could subsidize excess dealerships which were not economically viable
in short, you wanted the government to fund the continued empoyment of people in jobs which were not financially sustainable without the government money
what other forms of national socialism are you wanting Obama to embark on?
 

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so, let me see if i understand what your position actually is
you are critical of Obama because he did not loan more money to the auto makers so that they could subsidize excess dealerships which were not economically viable
in short, you wanted the government to fund the continued empoyment of people in jobs which were not financially sustainable without the government money
what other forms of national socialism are you wanting Obama to embark on?
Nope you didn't get it right. I'm asking questions and not necessarily being critical. I'm asking how closing down dealerships saved Chrysler as was stated. I'm asking who made the decision to close the dealerships when they did? I'm asking how could putting people out of work at that time, helps our economy?

Sorry you see it as being critical of Obama and while I understand your protectionism of all things Obama - I don't know that this has anything to do with him. Perhaps we can start by pointing me to all the information that apparently some in this thread leads them to conclude these dealership closings were good, necessary, inevitable and saved Chrysler / GM. Can you do that?

You see, asking questions isn't being critical.
 

roughdraft274

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What report - can you direct me to something ?
http://www.nytimes.com/2010/07/19/business/19autos.html?src=busln

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.... About a year ago, G.M. informed more than 2,000 dealers that some or all of their franchise agreements would not be renewed in October 2010. Chrysler eliminated 789 dealers, or about a quarter of its network, with less than a month’s notice....Both carmakers voluntarily rescinded some terminations — 666 at G.M. and 50 at Chrysler...In addition, a small number of dealerships won the opportunity to be reinstated through an arbitration process created by Congress; that process has only a handful of cases left to consider and is scheduled to be completed by the end of this month.
Sure it's possible... but I don't know that it would have happened eventually. What information do you have that leads you to that conclusion?
They didn't know exactly what would happen either, which is why they wanted to be safe and make sure that these car companies could survive and come out of this mess. They were playing it safe, maybe you could argue, which I would hardly call a bad thing or bash someone for.
Who's "they"? Chrysler, the Fed or the person put in charge of the bankruptcy?
See the first part. They as in the car companies.
I guess my complaint is you and OV have such clear understanding and nod your heads that these closings were inevitable, required, and would have happened anyway. I just don't see it ... maybe you can help educate me as to what leads you to those conclusions. Everything I've read doesn't... :shrug:
Well, since the car companies were already panning to close them to try and save money, and because this report that is referenced in the new york times, from the link, said that they needed to shut down some under-performing dealerships etc.

I see no reason to buy into your theory that the government wants to just put as many people as possible on unemployment, as you suggested in your first post on this thread.

I don't see any reason to question they're actions. Closing down the under-performing dealerships that cost them money would be one of the first steps that I would think any competent CEO of a car company would do if they were losing money and weren't profitable. During good years I'm sure they made enough to allow those under-performing dealerships that were losing money to live off of surplus profits from other dealerships, but not during a recession.

It seems like a smart move from every way i look at it and I think the only possible criticism is that they reacted too quickly, which is possible, but then again maybe they reacted just in time.

One thing I'm sure about, if Obama would have came in and said that they weren't allowed to cut any of the dealerships that were losing them money all the conservatives would be bitching about how he has no idea to run a country or a business for that matter. It's sickening how they find a way to attack regardless of whether he chooses a,b,c or d.
 

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Nope you didn't get it right. I'm asking questions and not necessarily being critical. I'm asking how closing down dealerships saved Chrysler as was stated. I'm asking who made the decision to close the dealerships when they did? I'm asking how could putting people out of work at that time, helps our economy?

Sorry you see it as being critical of Obama and while I understand your protectionism of all things Obama - I don't know that this has anything to do with him. Perhaps we can start by pointing me to all the information that apparently some in this thread leads them to conclude these dealership closings were good, necessary, inevitable and saved Chrysler / GM. Can you do that?

You see, asking questions isn't being critical.
ok, i will accept your point that your post is one only seeking information and you are not being critical of Obama because he failed to fund economically unviable jobs
 

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Thanks for the link.

Well, since the car companies were already panning to close them to try and save money, and because this report that is referenced in the new york times, from the link, said that they needed to shut down some under-performing dealerships etc.
The article does state the car companies were planning to close these dealerships before the bankruptcy filing... but under-performing dealerships are closed all the time. It doesn't say exactly when they decided to do it but the article leads one to believe it was during the filing. It might be that the company knew they were going to file Chapter 13 and pre-emptively cut, but it's not clear to me from the link provided.. the methods were also called into question as well as the timing.

I see no reason to buy into your theory that the government wants to just put as many people as possible on unemployment, as you suggested in your first post on this thread.
I was being a tad facitious. However the article states it quite plainly:

NY Times said:
“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.

I don't see any reason to question they're actions. Closing down the under-performing dealerships that cost them money would be one of the first steps that I would think any competent CEO of a car company would do if they were losing money and weren't profitable. During good years I'm sure they made enough to allow those under-performing dealerships that were losing money to live off of surplus profits from other dealerships, but not during a recession.
My reason to question is again, in the article you linked:

NY Times said:
About a year ago, G.M. informed more than 2,000 dealers that some or all of their franchise agreements would not be renewed in October 2010. Chrysler eliminated 789 dealers, or about a quarter of its network, with less than a month’s notice.

Both carmakers voluntarily rescinded some terminations — 666 at G.M. and 50 at Chrysler — which, the report said, “suggests, at the very least, that the number and speed of the terminations was not necessarily critical to the manufacturers’ viability.”

In addition, a small number of dealerships won the opportunity to be reinstated through an arbitration process created by Congress; that process has only a handful of cases left to consider and is scheduled to be completed by the end of this month.

According to the report, Chrysler estimated it would save $45,500 for every dealership it closed, while G.M. projected a savings of $1.1 million a dealership, largely a result of reduced incentive payments. “The difference in these estimates alone casts doubt on their credibility,” the report said.

It seems like a smart move from every way i look at it and I think the only possible criticism is that they reacted too quickly, which is possible, but then again maybe they reacted just in time.
In general it's good business to keep efficiencies up. However the report calls into question the timing, which I also would question.

One thing I'm sure about, if Obama would have came in and said that they weren't allowed to cut any of the dealerships that were losing them money all the conservatives would be bitching about how he has no idea to run a country or a business for that matter. It's sickening how they find a way to attack regardless of whether he chooses a,b,c or d.
Personally, both company's should have filed Chapter 13 and received no bailout. If they went out of business then so be it. However, since that didn't happen, I have to say the article creates more questions than it answers. Again, it identifies in no way that the closings of these dealerships was the reason they pulled out of the bankruptcy or prevented bankruptcy.
 

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Thanks for the link.

The article does state the car companies were planning to close these dealerships before the bankruptcy filing... but under-performing dealerships are closed all the time. It doesn't say exactly when they decided to do it but the article leads one to believe it was during the filing. It might be that the company knew they were going to file Chapter 13 and pre-emptively cut, but it's not clear to me from the link provided.. the methods were also called into question as well as the timing.

I was being a tad facitious. However the article states it quite plainly:






My reason to question is again, in the article you linked:




In general it's good business to keep efficiencies up. However the report calls into question the timing, which I also would question.

Personally, both company's should have filed Chapter 13 and received no bailout. If they went out of business then so be it. However, since that didn't happen, I have to say the article creates more questions than it answers. Again, it identifies in no way that the closings of these dealerships was the reason they pulled out of the bankruptcy or prevented bankruptcy.
companies cannot file chapter 13. that is the provision in bankruptcy law for WAGE EARNERS
compaies can file under chapter 7 to liquidate and go out of business or they can file under chapter 11, and attempt to work out of their problems. the latter option was chosen and it appears to have been a wise choice
now, what is it you think Obama should have done differently regarding the automakers' situation
 

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companies cannot file chapter 13. that is the provision in bankruptcy law for WAGE EARNERS
compaies can file under chapter 7 to liquidate and go out of business or they can file under chapter 11, and attempt to work out of their problems. the latter option was chosen and it appears to have been a wise choice
now, what is it you think Obama should have done differently regarding the automakers' situation
Obama did not want the companies to file chapter 11 because it would have hurt the unions. This was more about the unions for Obama then it was the car companies
 

Ockham

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companies cannot file chapter 13. that is the provision in bankruptcy law for WAGE EARNERS
compaies can file under chapter 7 to liquidate and go out of business or they can file under chapter 11, and attempt to work out of their problems. the latter option was chosen and it appears to have been a wise choice
now, what is it you think Obama should have done differently regarding the automakers' situation
Thanks for the correction.

Obama should not have bailed out the car company's.
 

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Thanks for the correction.

Obama should not have bailed out the car company's.
so, then you do agree with the decision to allow those economically inefficient dealerships to have been closed ... getting back to the thread subject?
 

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so, then you do agree with the decision to allow those economically inefficient dealerships to have been closed ... getting back to the thread subject?
He should have let the entire company close, as would have been done with the banks. Definately a harder pill to swallow and yes, it would hurt more in the short term. Long term it would have righted the system and let company's and banks know they are not too big to fail. Instead, we have an extended recession - with a possibility of a double dip - company's and banks owned by the Federal Government - bailed out with billions in taxpayer money.

What I'm questioning in this case is what the effects are of closing these dealerships pre-emptively. Was this for Chrysler and GM to keep more for the executives when they knew they'd be going through Chapter 11 - or - was the motive really protecting the company? Again, I go back to closing these dealerships add to the joblessness --- but since they were getting bailed out, why not keep most of these dealerships open and only close the one's that were in real trouble and as was identified - would have closed anyway?
 

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He should have let the entire company close, as would have been done with the banks. Definately a harder pill to swallow and yes, it would hurt more in the short term. Long term it would have righted the system and let company's and banks know they are not too big to fail. Instead, we have an extended recession - with a possibility of a double dip - company's and banks owned by the Federal Government - bailed out with billions in taxpayer money.

What I'm questioning in this case is what the effects are of closing these dealerships pre-emptively. Was this for Chrysler and GM to keep more for the executives when they knew they'd be going through Chapter 11 - or - was the motive really protecting the company? Again, I go back to closing these dealerships add to the joblessness --- but since they were getting bailed out, why not keep most of these dealerships open and only close the one's that were in real trouble and as was identified - would have closed anyway?
ok, then identify for us the ones which were closed prematurely ... and which would have remained economically viable dealerships but for the lack of automaker support. it seems you want to have a reason to complain but don't ... only you complain anyway
 
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