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TARP Audit Questions Rush to Close Auto Dealers

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?

Closing the dealerships in bankrupcty saved the company money. During bankrupcty a company can break contract without financial penalty. Had GM waited untill it exited bankruptcy it would cost GM a large amount of money to close them. As such it made financial sense to close them at that time as to ensure GM becomes a profitable enterprise in the future. At less cost to the government
 
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

So provide me the complete list of both GM and Chrysler locations which were identified to close --- all 3,000 or so, I'd I'll tell you which one's I would have closed. I know of no published list but since you want me to identify for "us" which one's were closed prematurely - I need to entire list. Or... you can continue to make requests that cannot be fulfilled --- but hey, get me the entire list and I'll give you my take and rationale.

Remember we discussed this a few posts back? Asking questions does not equate compaining.

You've asked questions of me, I've answered them honestly. Now you're back on about me complaining... :shrug:
 
Closing the dealerships in bankrupcty saved the company money. During bankrupcty a company can break contract without financial penalty. Had GM waited untill it exited bankruptcy it would cost GM a large amount of money to close them. As such it made financial sense to close them at that time as to ensure GM becomes a profitable enterprise in the future. At less cost to the government

So basically what you're saying is GM and Chrysler decided to keep the money and get rid of the employees as it was financially better for them, their profits and the executives. Right?
 
So basically what you're saying is GM and Chrysler decided to keep the money and get rid of the employees as it was financially better for them, their profits and the executives. Right?


GM got rid of employees at manufacturing plants, laid off salaried employee's, closed plants, the closure of dealerships was one part of the plan to return GM to becoming a profitable enterprise that would be capable of being an ongoing operation. For the benifit of dealerships that remain open, employee's that remain, pensioners, and the taxpayer
 
So provide me the complete list of both GM and Chrysler locations which were identified to close --- all 3,000 or so, I'd I'll tell you which one's I would have closed. I know of no published list but since you want me to identify for "us" which one's were closed prematurely - I need to entire list. Or... you can continue to make requests that cannot be fulfilled --- but hey, get me the entire list and I'll give you my take and rationale.

Remember we discussed this a few posts back? Asking questions does not equate compaining.

You've asked questions of me, I've answered them honestly. Now you're back on about me complaining... :shrug:

you seem to have forgotten that you moved away from merely asking questions to posting inane opinion. here, let me show you your own words:
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?
notice how you argue that (1) the government should have allowed the automakers (and the banks) to fail, putting all employees out of work ... while simultaneously complaining that unprofitable dealerships should have been propped up with government dollars to preserve dealership jobs
i can only conclude that you haven't the foggiest notion about what you are complaining about
 
you seem to have forgotten that you moved away from merely asking questions to posting inane opinion.

Which part is inane --- that closing dealerships added to the joblessness?

here, let me show you your own words:

Yes let's look at my own words...

Ockham said:
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?

notice how you argue that (1) the government should have allowed the automakers (and the banks) to fail, putting all employees out of work ...
I'm not arguing it, I'm stating that's my hypothetical opinion of what Obama should have done - in response to your asking.

while simultaneously complaining that unprofitable dealerships should have been propped up with government dollars to preserve dealership jobs
i can only conclude that you haven't the foggiest notion about what you are complaining about
Perhaps it's because I'm not complaining. You seem to have a problem discerning the difference between asking a question and making a complaint. Here --- let me help give you an example.


Example 1: "Bill, did you take out the garbage?"

This is an example of a QUESTION. A query is being made asking if Bill completed a task.

Example 2: "Bill just cannot handle taking out the garbage and no matter how many times I ask him to take out the garbage he never seems to do it and I end up doing it and I'm tired of taking out the garbage."

This is an example of a complaint.


I hope you can reference this post for future use when you get confused.
 
Which part is inane --- that closing dealerships added to the joblessness?
no. the inanity is found within the disconnect between the two positions you have taken:
1. that the government should NOT have aided the automakers
2. the government should have provided additional money to the automakers to preserve unprofitable jobs at the now closed car dealerships



Yes let's look at my own words...
stay tuned, we are about to



I'm not arguing it, I'm stating that's my hypothetical opinion of what Obama should have done - in response to your asking.
again, you illustrate you haven't a clue about what you are posting. you are not "arguing" an opinion you are "stating" one, as if there is a distinction to be made which should allow your position to be viewed any differently

Perhaps it's because I'm not complaining. You seem to have a problem discerning the difference between asking a question and making a complaint. Here --- let me help give you an example.


Example 1: "Bill, did you take out the garbage?"

This is an example of a QUESTION. A query is being made asking if Bill completed a task.

Example 2: "Bill just cannot handle taking out the garbage and no matter how many times I ask him to take out the garbage he never seems to do it and I end up doing it and I'm tired of taking out the garbage."

This is an example of a complaint.


I hope you can reference this post for future use when you get confused.
here, let's use your own words to illustrate your stated position:
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?
appears you have staked out the position that the dealership closings contributed to the unemployment rolls which they did. but you then go on to advocate for the government to bailout dealership jobs, despite the recognition that those jobs were unprofitable. you want the government to subsidize these underperforming dealerships. maybe your brand of conservatism is one which endorses the government paying for private sector jobs that are not profitable. as a fiscal conservative, that is not how i view conservatism; which causes me to conclude your posts on this matter make no sense. that is what i actually find confusing about your positions
 
no. the inanity is found within the disconnect between the two positions you have taken:
1. that the government should NOT have aided the automakers
2. the government should have provided additional money to the automakers to preserve unprofitable jobs at the now closed car dealerships

1. This is the "hypothetical" position - you asked me to answer.
2. Thisis the "real life" questions I've been asking about.

Still having trouble huh?

appears you have staked out the position that the dealership closings contributed to the unemployment rolls which they did.
Well that's nice.

but you then go on to advocate for the government to bailout dealership jobs, despite the recognition that those jobs were unprofitable.
Really? When did I recognize the unprofitability?

you want the government to subsidize these underperforming dealerships.
I don't know they were underperforming - you didn't provide a list so I could identify which one's I'd close or keep open. Sad.

maybe your brand of conservatism is one which endorses the government paying for private sector jobs that are not profitable.
Maybe you don't know the difference between questions and opinions. Or for that matter, a complaint.

as a fiscal conservative, that is not how i view conservatism;
I find your admission of being a conservative anything - laughable.

which causes me to conclude your posts on this matter make no sense. that is what i actually find confusing about your positions
You make no sense. Hate to tell ya, you're the one confused. :shrug:
 
Closing the dealerships in bankrupcty saved the company money. During bankrupcty a company can break contract without financial penalty. Had GM waited untill it exited bankruptcy it would cost GM a large amount of money to close them. As such it made financial sense to close them at that time as to ensure GM becomes a profitable enterprise in the future. At less cost to the government

It may have saved money when union contracts were renegotiated
 
It may have saved money when union contracts were renegotiated

And it did, wages and benifits were cut, the number of employee's was reduced as well
 
The whole move was to prevent a bankruptcy of GM and Chrysler. It worked. :shrug:

Actually, they did go bankrupt (chapter XI), but they had a pre-packaged bankruptcy, which minimized damage to the economy as a whole and the auto industry and rust belt states in particular. The idea of cutting overhead is corporate restructuring 101.... carrying underperforming dealerships is going to be superfluous overhead. I am sure their are disputes about how they determined what dealerships (including politics internal to Crysler and GM), thus they made mistakes, but the overall result is a huge plus. GM appears to once again be a vibrant auto manufactuerer. I still don't understand what those who did not favor the auto industry bailout would have wanted. Clearly the result of the alternative would have been a far worst outcome than that which was achieved.

You can find much to critize about the Obama administration, but overall this is the wrong thing as it appears to be a huge success.
 
And it did, wages and benifits were cut, the number of employee's was reduced as well

Not to the point courts would have. Obama saved the unions and in the process cost many jobs. Obama cared about the union management not the workers.

If GM was already closing dealers why did Obama rush the process? Maybe Obama wanted the recoginition thhat he did this even though the company was going to do it any way. more deception by Obama.

The courts and legal system were not allowed to do their job.
 
Not to the point courts would have. Obama saved the unions and in the process cost many jobs. Obama cared about the union management not the workers.

If GM was already closing dealers why did Obama rush the process? Maybe Obama wanted the recoginition thhat he did this even though the company was going to do it any way. more deception by Obama.

The courts and legal system were not allowed to do their job.


Did you not read a post earlier?

During bankruptcy GM can close dealerships without having to payout the dealers, saving GM lots of money.

Also remember. GM needs auto plants and workers to make the cars that the dealers sell. GM closed dealers because it has/had to many. Just like it had to many autoworkers, both were rationalized. Both area's had job loss's
 
Did you not read a post earlier?

During bankruptcy GM can close dealerships without having to payout the dealers, saving GM lots of money.

Also remember. GM needs auto plants and workers to make the cars that the dealers sell. GM closed dealers because it has/had to many. Just like it had to many autoworkers, both were rationalized. Both area's had job loss's

Correct did Obama cause more job loss than was needed? Why is it Obama did not let the courts work but came up with a preplanned bankruptcy. Obama was only concerned about the unions that helped him get elected
 
Correct did Obama cause more job loss than was needed? Why is it Obama did not let the courts work but came up with a preplanned bankruptcy. Obama was only concerned about the unions that helped him get elected

If the dealerships were not productive then the job loss's were needed were they not. Unless you like the government to subsidize car dealerships
 
If the dealerships were not productive then the job loss's were needed were they not. Unless you like the government to subsidize car dealerships

The car companies were already in the process when Obama demanded it so it would have happeened anyway
 
The car companies were already in the process when Obama demanded it so it would have happeened anyway

The car companies were in the process of going bankrupt and closing down, which is why they came running to the government, to save the company, which would save jobs. The government demanded a business plan that would put the companies on a road to profitability, part of that plan was the accerated dealership closing's that bankruptcy allowed to take place at a minimum of costs to GM. If GM waited untill it was no longer in bankruptcy it would have cost alot more money
 
The car companies were in the process of going bankrupt and closing down, which is why they came running to the government, to save the company, which would save jobs. The government demanded a business plan that would put the companies on a road to profitability, part of that plan was the accerated dealership closing's that bankruptcy allowed to take place at a minimum of costs to GM. If GM waited untill it was no longer in bankruptcy it would have cost alot more money

Wrong they had not even filed yet they were still trying to fix it. Obama stepped in and took over
 
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

The dealers are seperate entities from Gm and C-h-r-y-s-l-e-r. Closing them had zero effect on GM and Chrysler's sinking, or swimming.
 
The dealers are seperate entities from Gm and C-h-r-y-s-l-e-r. Closing them had zero effect on GM and Chrysler's sinking, or swimming.

Here is something to read

Why are Chrysler and General Motors closing so many dealerships? - By Christopher Beam - Slate Magazine

How does shuttering dealerships help car companies?

It saves them money. Car companies don't actually own dealerships—instead, they have contractual agreements that dictate factors like location, display space, signage, and service options. Nevertheless, Chrysler and GM and other auto manufacturers must maintain a large, costly field force of trainers (to train technicians to fix cars), salespeople (to persuade dealers to buy more cars), and auditors (to verify claims for reimbursement). The more dealerships, the more go-betweens a car company needs to employ and the more money it has to shell out.

Shuttering dealerships could also result in less intra-brand price competition. Car buyers will typically visit at least two different dealerships in order to compare prices before making a purchase. By playing dealers against one another, buyers lop an estimated 2 percent off revenues. But if there are fewer dealers, customers can't haggle as easily, and car companies make more money. There's a tradeoff, of course—fewer dealerships means customers have to drive farther. But at the moment, there are so many dealerships that the benefits of reducing price competition outweigh the harm of having fewer locations.

cont
 
Thanks for the correction.

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

OK... please describe what the world would look like right now if he had not.

The baseline of your analysis: The government likely did not lose a dime on this transaction (and probably made money)... we still have an auto industry (with GM appearing to be a very viabrant company ready to re-float shares in one of the world's largest IPO's.... (the government expected value of which is north of $50B, their investment), and we kept the rust belt states from seeing 25-30% unemployment. Please explain how the alternative would have produced a better outcome.
 
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Please explain how the alternative would have produced a better outcome.

Especially since the reorganizations achieved effectively a virtually total restructuring. Gone are super strong unions. Gone are many unprofitable models. Gone are many legacy costs. Basically, Detroit was able to achieve what it wanted to do in a year what it couldn't do for a decade. The real problem is ensuring it doesn't fall back into that model of failure.
 
OK... please describe what the world would look like right now if he had not.

The baseline of your analysis: The government likely did not lose a dime on this transaction (and probably made money)... we still have an auto industry (with GM appearing to be a very viabrant company ready to re-float shares in one of the world's largest IPO's.... (the government expected value of which is north of $50B, their investment), and we kept the rust belt states from seeing 25-30% unemployment. Please explain how the alternative would have produced a better outcome.

GM would have went bankruptcy and restructured and still be doing well. Chrysler has been struggling for many years and are still in business. Obama only saved the unions which what his goal was
 
GM would have went bankruptcy and restructured and still be doing well. Chrysler has been struggling for many years and are still in business. Obama only saved the unions which what his goal was

in a down economy, with the automakers filing bankruptcy, i don't see a whole lot of capital being loaned to them - unless it is by the government

but maybe you know the alternative source of private capital they had access to, which would have eliminated the need for a bailout. please identify the potential source of the additional monies the automakers needed to successfully emerge from bankruptcy
 
in a down economy, with the automakers filing bankruptcy, i don't see a whole lot of capital being loaned to them - unless it is by the government

but maybe you know the alternative source of private capital they had access to, which would have eliminated the need for a bailout. please identify the potential source of the additional monies the automakers needed to successfully emerge from bankruptcy

Bankruptcy would have allowed re-negotiation of contracts. Obama stopped this because it would have hurt the unions.

Chrysler has been in trouble for years but kept running
 
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