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    Who are the NERD fund donors Mr Snyder?

    Raise the curtain.

    Second thoughts in Congress about ripping off the Band-Aid


    By Nick, Section News
    Posted on Thu Jul 09, 2009 at 07:48:24 AM EST
    Tags: Congress, GM, Chrysler, bankruptcy (all tags)

    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:

    The bill would turn back the clock to before the companies filed for bankruptcy, restoring the 789 dealers cut by Chrysler and 1,300 dealers GM chose to wind down...

    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.

    < Detroit Free Press Pens Editorial Hatchet Piece On MI AG Mike Cox | Thursday in the Sphere: July 9 >


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    Agreed (none / 0) (#2)
    by rdww on Thu Jul 09, 2009 at 09:06:30 AM EST
    I also don't see the logic in "fewer dealers is good."  Here in mid-Michigan, we have to drive 50 miles or so to buy a new Toyota, Honda or Nissan.  Still, being "under-dealered" in this way doesn't seem to have hurt any of the import brands.
    I think the bigger problem with this proposal is that cutting or not cutting the dealerships is being taken out of the realm of business restructuring decisions and into that of politics.


    • Exactly. by Nick, 07/09/2009 09:22:11 AM EST (none / 0)
    Congress Is Arrogant (none / 0) (#3)
    by MichWolverine on Thu Jul 09, 2009 at 09:20:48 AM EST
    How is it that people who won a popularity contest suddenly became EXPERTS regarding the automotive industry, the banking industry, the oil industry, economics, the health industry, the insurance industry, weather/climate change and foreign policy?

    The answer?  They AREN'T experts.

    Many in Congress are 'career' politicians, meaning they have absolutely no idea what it would be like to have a real job in the real world; while some in Congress barely made it through high school, many not even graduating from college. Only a handful had any military experience.

    Anyone who believes this massive group of morons has anything more than the collective brainpower of a box of rocks is in for a rude awakening.

    The more arrogant they are, the more 'answers' or 'solutions' they come up with.

    Who will save America from the 'answers' and 'solutions' coming from the brains of these uninformed, uneducated dimwits? The uninformed (ignorant) voters?

    Bullied Automakers (none / 0) (#5)
    by BruceB on Fri Jul 10, 2009 at 11:43:41 AM EST
    I believe that Chrysler and GM were bullied into cutting dealerships due to the fact that the Government bullies knew nothing about how to make a profit!  My guess is the reason Obama fired Wagner was that Wagner knows the business and didn't want to go along with downsizing.  
    Wagner and most companies that manufacture stuff know and understand that they have to have somebody sell their stuff.  Pretty simple!  
    Automobile companies need dealerships to sell cars.  
    The fewer dealerships the fewer cars the automakers will sell.  
    The more dealerships the more choices the customer has.  
    If the automakers leave the dealers out there too long the cut off dealers will find a different brand to sell, Chinese-India etc!  Wouldn't that be great!  Perfect recipe for more failure.  
    The dealers and their employees know how to sell and how to service cars and believe me it would be easy for them to pick up a foreign brand, especially after Cap And Trade.
    Downsizing?  What's with all the talk about downsizing anyway?  Downsizing is FAILURE, I want GM to be the biggest automobile manufacturer on Earth, Ford 2nd and Chrysler 3rd although Chrysler is now foreign owned.  This Democrat Administration is preparing America for a future of subservience(sp) and I don't like it one bit!  
    Sorry to Rant but I am sick of this failure syndrome the Democrats have put us, U.S., in.  Democrats put us here and they are going to get us out of it?  How can the American people swallow that?  

    • BruceB by stevenstmason, 07/10/2009 11:33:32 PM EST (none / 0)
    Do you think (none / 0) (#8)
    by stevenstmason on Fri Jul 10, 2009 at 11:35:18 PM EST
    that if these had been privately initiated bankruptcies that Congress wouldn't have gotten involved? How many "free market" Republicans voted for this proposal? That's what I thought.

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