Larry Summers, the White House’s chief economic adviser, spoke out earlier this week in support of General Motors and Chrysler closing hundreds of dealers across the country. Summers warned that efforts to keep the dealers open could be detrimental to the automakers and put the repayment of the tax payers’ $70 billion in financial aid in jeopardy.
A House bill is currently gaining support that calls for GM to reverse its decision to close more than 1,100 U.S. dealers. The bill also contains a clause that would force Chrysler to reopen its 789 shuttered dealerships.
“We believe that restructuring, along the lines of the restructuring plans that the companies committed to and we agreed to provide financing for, is crucial,” Summers told The Detroit News. “We’ve been very clear that companies needed to be run commercially, rather than politically.”
Summers added that government control was not the best solution for Chrysler or GM, saying the “best protection for the taxpayers’ investment is to ensure that the companies are managed commercially.” In all, U.S. tax payers have spent more than $70 billion on Chrysler, GM and their respective financial arms.
06/17, 12:56 PM
posted by:
mayer_ray_nagin
So an administration tool comes out in favor of his boss’s BS. Is this really news?
06/17, 12:57 PM
posted by:
carstuff
Unbelievable, Congress says let GM/Chrysler go bankrupt. They are failed companies and this is the capitalistic American way. Damn the consequences of massive job loss because it only effects Detroit.
Yet when they do go through bankruptcy and close some of the dealerships or THEIR local plants and suppliers do go under all hell breaks loose in Congress to protect their own.
06/17, 1:08 PM
posted by:
JakeK66
“best protection for the taxpayers’ investment is to ensure that the companies are managed commercially.”
-So when did the Democrats finally figure that one out? If that’s their honest belief WHY are we imposing ridiulous CAFE and safety standards on our cars? We’re so f#$%ed up.
06/17, 1:36 PM
posted by:
Borat
“A House bill is currently gaining support that calls for GM to reverse its decision to close more than 1,100 U.S. dealers. The bill also contains a clause that would force Chrysler to reopen its 789 shuttered dealerships.” back to normal.
06/17, 1:40 PM
posted by:
shaver
My local Dodge dealership is already long gone.
06/17, 1:45 PM
posted by:
shaver
And I’m in favor of Larry Summers being fired, the Whitehouze, the House of Corp Reps and Con-airgress closing.
06/17, 1:46 PM
posted by:
Bg357
When is someone going to explain how pulling franchises helps the manufacturers in ANY way?
We always get this bilge about how they had to do this to return to profitability… blah, blah, blah…
These dealerships aren’t owned by GM or Chrysler! They sell cars for the company, and give the brand exposure. How is pulling franchises going to help them sell more cars?? It’s not, and it doesn’t make any sense.
06/17, 2:15 PM
posted by:
The Stig
@JakeK66,
Well, you gotta have some regulatory oversight under the umbrella of CAFE or safety standards, right? Left to their own devices, Automakers will morph themselves into a derivative of the Tobacco industry, if they’re not already at that point. Remember – Automakers don’t care one iota about you. Thinking they do is delusional.
06/17, 3:14 PM
posted by:
JakeK66
Stig,
That’s a pretty sad look at the auto industry – obviously they care about you some, or you don’t buy there product again. If you get hurt in an accident, you don’t buy that car again. If you DIE, they lose a customer. I believe they care more than you think. Look at how many manufacturers put on side airbags/stability control without any law that says they have to. IIHS does there own crash test 100x superior to the governments, so we don’t need their oversight there, or you couldn’t afford insurance on an unsafe car. People don’t want to pay their life savings at the pump forcing them to look for more fuel effecient cars – TADA! Auto manufacturers have to respond. It’s called competition – try opening up a economics book sometime – also read the part about how governments interaction in industry creates inefficiency for everyone.
06/17, 6:00 PM
posted by:
The Stig
Jake,
They give the illusion they care just enough to satisfy themselves from a regulatory and legal standpoint. Regarding safety issues, as you say, the only reason for them to do this is because it’s marketable. Same with fuel efficiency or being green, etc.