Monday, July 19, 2010

Government-run Motors

Remember when we all heard that the government had to take over General Motors and Chrysler to make them run better and save all those jobs. The car companies couldn't go through a regular bankruptcy procedure because that would just not work and only the government could make it all work out. One of the things that the car companies did was close a lot of dealerships which was something that they needed to do. Of course, what the companies also needed to do was renegotiate their pension promises for unions, but of course, the administration didn't want to let that happen. Oh, no.

So now we're finding out a bit about how things went with the government pulling the strings and the report is not something to give anyone confidence in how well the government can run our lives.
President Obama’s auto task force pressed General Motors and Chrysler to close scores of dealerships without adequately considering the jobs that would be lost or having a firm idea of the cost savings that would be achieved, an audit of the process has concluded.

The report by Neil M. Barofsky, the special inspector general for the Troubled Asset Relief Program of the Treasury Department, said both carmakers needed to shut down some underperforming dealerships. But it questioned whether the cuts should have been made so quickly, particularly during a recession. The report, released on Sunday, estimated that tens of thousands of jobs were lost as a result.

“It is not at all clear that the greatly accelerated pace of the dealership closings during one of the most severe economic downturns in our nation’s history was either necessary for the sake of the companies’ economic survival or prudent for the sake of the nation’s economic recovery,” the report said.
So you mean that the same federal government that couldn't organize a swift reaction to the Gulf oil spill also couldn't do a great job running the auto companies. Closing the dealerships might have been necessary, but the whole procedure wasn't done well. But close enough for government work, right?