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  • Government in the Way Again at GM and Chrysler

    There’s new evidence that General Motors and Chrysler, both owned partly by taxpayers, are still facing interference in the way they are run. The latest example comes not from the Obama Administration, but from Congress.

    At issue are the closures of over 2,000 dealerships announced by the two firms last summer. Despite much grumbling, the decisions appeared to be a non-political one, potentially saving as much as $2.5 billion annually according to the Washington Post. But politics did come in, in the form of congressional pressure to keep the dealerships open. Now GM and Chrysler seem to be bowing – at least in part –to that pressure.

    The NY Times reported on Friday that GM and Chrysler have announced plans to “re-examine decisions to close about 2,000 dealerships and that some would probably stay open. Or reopen.” The announcements seem to be aimed at preventing movement on a house bill that would effectively force all dealerships to remain open. Although the bill is still only in committee it has attracted 284 co-sponsors, more than enough to get the attention of the government-sponsored firms.

    This isn’t the first time Congress has put political pressure on the firms. As the Wall Street Journal reported in October, there has been frequent pressure from members of Congress, pushing them to reverse decisions from plants closings, to contracting, to shuttering dealerships. So far according to the Wall Street Journal, GM has acknowledged that they reversed the closure decision on 70 dealerships, although they insist with a straight face that each of the decisions were based on their merits. Apparently Congress is still not satisfied.

    In a release responding to the GM and Chrysler announcements, Rep. Chris Van Hollen of Maryland stated that the efforts have “fallen short” and promises to “re-double” his efforts to enact legislation that will give auto dealers a “fair and reasonable opportunity to get back in business”. Both bailed out automakers face the difficult task of returning to viability. Such political interference will not make this task any easier.

    Meinan Goto currently is a member of the Young Leaders Program at the Heritage Foundation. For more information on interning at Heritage, please visit: http://www.heritage.org/about/departments/ylp.cfm

    Posted in Economics [slideshow_deploy]

    13 Responses to Government in the Way Again at GM and Chrysler

    1. Larry Huffman, Ohio says:

      Sorry, but indications are that politics entered and perhaps dominated the closures to start with. They do NOT appear to have been nonpolitical. Perhaps the Foundry would be better off investigating that instead of acting as though no politics were involved.

    2. Ben Franklin, IN says:

      Shocked, I am.

    3. carque9, texas says:

      vote em all out in 2010.

    4. Bud, Tampa says:

      I bought a Mercedes. Not because I'm not a loyal American. I strongly support the manufacture, export and the purchase of American goods and services. That's what makes our economy strong. I served in the army 22 years. That doesn't make me a hero either but it gives me the right to do pretty much what I want and voice a well earned opinion. I bought it to make a point. Obama can't run the country. He needs to get out of the car business. I won't buy from him. I want to make another point about this gaggle in Coopenhagan. I was in germany last week visiting old friends. We wer cruising down to Munich on the autobahn at about 140 km per hour (84 mph). You see, Richard doesn't like to go much faster than that because it cuts into his 47 mile per gallon average. Yes, 47 MPG (BMW) at 84 mile per hour. and this my friends is why liberals and govrenments shouldn't make or control the auto industry.

    5. John Fisgus MD says:

      Mr. Huffman is correct –

      There was evidence that the closing of dealerships was tilted towards those that donated to the democratic party – or democratic operatives. I hardly think anything this administration does is "non-political"

    6. Jeanne Stotler, wood says:

      Someone needs to examine all activities by this administration including ACORN and SUIA?? not sure on this spelling. There has been underground movements going on for some time by democrats, re: the hanging chad,this one is the worse. This needs to be examined as it smells like days of yore and corrupt Chicago politics only more subtle than breaking knee caps and shootings on street corners, bombing of businesses. This is the most reasonest Congress and Administration, they need to be stopped and only people like Mark Levin, Sean Hannity,Mike Church, Laura Ingram, Fox news and the Heritage Foundation can bring the truth to the surface and get these people out in the open and out of office, maybe tried for Treason.

    7. Claude Cornell says:

      Concerning Bud's commemt, how much do you think the German government is involved in it's car industry. Socialism does that.

    8. Tom /Georgia says:

      Creeping socialism will and must be accompanied by creeping totalitarianism.

      The velvet glove of socialism will always contain an iron fist.

      The Copenhagen agreement would assassinate all U.S. car companies.

      In the end, could Copenhagen be to WW III what Versailles was to WW II? The genesis of something truly evil?

    9. philip says:


    10. MLP, Bellingham says:

      This is exactly the reason the Founders in our US Constitution, limited the Federal Government on the power of intrusion into private lives and business' and why trying to run our health care would be an unaffordable disaster.

    11. Richard Upton Eugene says:

      This gang of hooligans in the whitehouse make me sick. Can't wait to see their next model of the Obama mobile and what it will look like. Anybody that votes for an incumbant in 2010 should be deported.

      I question the UAW on their choice of a leader? Obama has dealt them a loser of a future. I hope they understand that.

    12. Lynn B. DeSpain says:

      I don't know why Congress is complaining about Chrysler's inability to make a profit, according to history, Congress has yet to turn a profit itself!

    13. Perry OK says:

      We are buying used international trucks. Yes even for my wife to drive. There are less restrictions and the fuel mileage about the same. OH yeah we get 3 of them for the price of a new pick up.

      Why is it that something that was running smoothly went wry? My answer is GREED. The values and morals of our society have eroded to the lowest point I have ever heard of or seen. What is driving the stock market? We are.not investing and our stocks are up some but, do NOT reflect the current trend.

      I propose we hang the bankers responsible after church and before lunch, every sunday for the rest of windy s(ob) term. Maybe by showing a little moral and backbone WE the people can take our country back. We will also need to elect people from outside the political realm. A few people who know how to balance a check book and understand it is not always good news, would be refreshing!

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