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Second thoughts in Congress about ripping off the Band-AidBy Nick, Section News
This is what happens when politicians, not free markets take control of a major manufacturing company.
A House panel in Washington, DC yesterday unanimously approved a measure that would "save" 2,100 GM and Chrysler dealerships across the country. Which is great, right? I mean, who doesn't want to take a single, simple vote that on her face looks like it'll do nothing but save thousands of Michigan (and non-Michigan) jobs. Except of course for the fact that the dealership cuts were one big leg of the stool the bankrupt automakers were standing on to save many more thousands of other Michigan jobs. And you know what happens when you knock the leg off a stool. The Ivory Tower:
Executives from GM and Chrysler have both told Congress that cutting dealers was essential to their survival outside of bankruptcy, saving each company billions of dollars a year and strengthen their remaining sales force.
"This legislation, if passed, would put our long-term viability at risk," said GM spokesman Greg Martin. I get where the good Congress-people are coming from. I really, really do. Those dealership closings were tough, particularly because they hit folks across the country, even in states where there's never been any other Big 3 related work force. If you could save fifty local jobs simply by pushing a button, wouldn't you push it? The problem is, politicians are not (for the most part) businessmen. And before the Obama administration started nationalizing major Michigan employers, no Congressman was any kind of boss at GM or Chrysler. Suddenly, though, the Federalized Two have over 500 new quasi-members of their Board of Directors, and not a Utilitarian among them. Sure, you may save a few dealerships today but the entire company will be dead tomorrow. The market has been screaming for contraction for years. Excess dealerships are bleeding BILLIONS. Bankruptcy is targeted at helping these manufacturing giants contract as quickly and easily as possible so that they can survive into the future and eventually grow again. That can get sticky when every decision that gets made can suddenly be overturned by politicians and bureaucrats in DC who are more interested in reelection NEXT YEAR than a company's viability NEXT DECADE. Congress wants to save 2,100 dealerships? Great. We all do. But it's going to take more than a single populist vote on the floor of the US House of Representatives. Especially a vote that winds up doing much more harm than good. How about we try something else, just as a change of pace... the Obama administration and Congress stop micromanaging Michigan companies and let the businessmen and the bankruptcy courts figure out the best way to save the most jobs the quickest. Otherwise, all we're doing is prolonging the pain, delaying the inevitable and forcing thousands of working moms and dads across the country to float in one heck of a nasty breeze, tossed about by the whims of political expediency. That's not good business and that's not fair.
Second thoughts in Congress about ripping off the Band-Aid | 10 comments (10 topical, 0 hidden)
Second thoughts in Congress about ripping off the Band-Aid | 10 comments (10 topical, 0 hidden)
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