Congress Embarks On Auto Company Management

The micromanagement of GM and Chrysler by the government began in earnest today. In front of the Senate Commerce, Science and Transportation Committee the heads of the two auto makers were called to task for their treatment of dealers.

From Politico.com here is a sample of the hands off Obama policy:

 

“It’s a nationwide tragedy that a lot of us feel very strongly about,” Sen. John Rockefeller (D-W.Va.), chairman of the Senate Commerce, Science and Transportation Committee, said Wednesday in opening remarks at a hearing, noting that nearly 2,000dealershipsareslatedto close across the country, putting 100,000 jobs at risk. “Something that should not have happened and can be corrected.”

 

“Let me be very clear. I honestly don’t believe that companies should be allowed to take taxpayer funds for a bailout and then leave it for local dealers and their customers to fend for themselves with no real plan, with no real notice, no real help. It’s just plain wrong. You don’t do that,” Rockefeller said.

 

“We’re talking about dealers who invested everything they had … some of who are here today, and they’re just looking into a black hole right now.”

 

It goes on and on. The executives naturally defended themselves as best they could but when you’re arguing numbers against populist arguments and the other side controls the terms of the discussion, you lose.

If that were all there was to this it would be fine. Unfortunately, both Republicans and Democrats are asking how the government came to own these companies without consulting Congress. Of course, it’s about as disingenuous as you can be to ask that question at this point in time. Congress had plenty of time to engage and was all too happy to cede the responsibility for this fiasco to the administration. Now they’re going to do what they do best, which is to preen and strut for the cameras, display their pique and accomplish nothing. 

That’s not to say that their meddling won’t have an effect. I suspect that the closure of dealerships is going to be seriously damaged by them. In many respects it amounts to shooting fish in a barrel. The dealerships are prominent members of their communities, have the respect of the locals and put a not insubstantial amount of money into politicians’ pockets. It wouldn’t be a big surprise at all if the auto companies revise their plans to rationalize their dealer network.

Get ready for much more of this. You know the old saying that all politics is local. Well, in many respects the car business is one of the most local you will ever stumble across. To boot, it’s local all over the country.

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