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Old 07-19-2010, 01:33 AM   #1
XDCX
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Default Treasury Dept. faulted for pushing GM and Chrysler to speed Dealer Closings

Well, it only took the government a little over a year to figure out something we've known here since day-one, closing car dealerships doesn't save OEMs any money.

The opening paragraph of the Bloomberg story says it all - "The Obama administration’s push to accelerate General Motors Co. and Chrysler Group LLC dealership closings, aimed at helping the companies compete, may not have been necessary and added to unemployment, a U.S. watchdog said." Here's a link to the full report - click here

It would be great to see a new round of Congressional Investigations into what actually happened as it relates to dealer terminations. I'd love to see Fritz Henderson under oath explaining where the $2 Billion+ in cost savings is going to come from.

While I'm happy to see a report critical of the Task Force I doubt it will bring much satisfaction to the rejected dealers who have been living with this nightmare for the past 14 months.
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Old 07-19-2010, 06:57 AM   #2
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It just may, X. Throw a few of those former execs in a federal prison after it's been demonstrated that they flatly LIED to to Congress, and I'll bet that at least a few rejected dealers will fall asleep with a smile on their faces.
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Old 07-19-2010, 07:21 AM   #3
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Barofsky has been critical of many of the TARP programs since taking the position...he has blasted the handling of the investment banks, the insurance companies(AIG in particular), the mortgage meltdown, Fannie Mae and Gennie Mae fiasco...I don't think the administration was expecting his criticisms when they appointed him. Nice to see a government official who isn't afraid to stand up and call it like he sees it.
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Old 07-19-2010, 07:26 AM   #4
The StraightShooter
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Hopefully when the (R)'s retake the House and regain the power of subpoena we can have the appropriate hearings on this matter. Not expecting it to happen as no one really cares but I can dream...
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Old 07-19-2010, 08:25 AM   #5
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Quote:
Originally Posted by Noah View Post
It just may, X. Throw a few of those former execs in a federal prison after it's been demonstrated that they flatly LIED to to Congress, and I'll bet that at least a few rejected dealers will fall asleep with a smile on their faces.
While I agree with your point I doubt there will be any perjury convictions that result in prison terms. My bet is if it ever comes to the point of testimony under oath the Chrysler and GM executives will be able to demonstrate they were just following the commands of the Task Force.

In my view the Task Force had total control and they wielded their power with little regard to the consequences. (Hell, they fired GM's CEO without even consulting GM's Board of Directors.)

When I think back the the President's speeches he often boasted that all parties were making sacrifices to save GM and Chrysler - the UAW, the white collar employees, the bond holders, the suppliers, etc. My bet is the Task Force concluded they needed to wipe-out 25% of the dealers just for appearances. I doubt there was too much thought that went into the ramifications of their decision - they just needed to show that the dealers got hurt too.

As I've said before, I hope one of the insiders writes a book one day that details the events that took place in 2009.
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Old 07-19-2010, 08:28 AM   #6
srt
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Default Tarp Audit

In some small way this feels good. Someone recognizes the absolute stupidity of the dealer terminations. That being said, it probably is too much to hope for any restitution for this bold and unconstitutional move by the Task Force and the brain trust at the Treasury Dept. I'm curious to see if anyone at NADA is aware of this report and what their reaction is. When was this released? I became aware of it during the weekend which is probably not a big news time. This is more reason to hope for big changes in Washington. I can't imagine many of those who were terminated are looking for a continued status quo. I'm really trying to give it up but it's not that easy. Enough said and God Bless America!
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Old 07-19-2010, 08:29 AM   #7
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Originally Posted by DealerEx View Post
Nice to see a government official who isn't afraid to stand up and call it like he sees it.
I agree.

That said, I'm sure the White House wants this issue to disappear and they'll likely be using their resources to kill any momentum this report may generate.
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Old 07-19-2010, 08:36 AM   #8
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Quote:
Originally Posted by XDCX View Post
I agree.

That said, I'm sure the White House wants this issue to disappear and they'll likely be using their resources to kill any momentum this report may generate.
And likewise, I hope when the next election rolls around we are able to use our resources and make the current administration / resident of the White House disappear.
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Old 07-19-2010, 10:23 AM   #9
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Quote:
Originally Posted by srt View Post
I'm curious to see if anyone at NADA is aware of this report and what their reaction is.
Here's a link to NADA's spin - click here

Maybe I'm jaded, but it seems to me the NADA's trying to take credit for the results generated via CRDR. Nothing new about that.

Quote:
Originally Posted by srt View Post
When was this released? I became aware of it during the weekend which is probably not a big news time. This is more reason to hope for big changes in Washington.
I believe the report was released Sunday afternoon and I'm betting that was a strategic decision because it's such a slow time for news.

Quote:
Originally Posted by srt View Post
I can't imagine many of those who were terminated are looking for a continued status quo. I'm really trying to give it up but it's not that easy. Enough said and God Bless America!
I have heard the exact same thing from other rejected dealers....
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Old 07-19-2010, 11:53 AM   #10
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Default Link to the SIGTARP Report

For those who may be interested, here's a link that will allow you to download the 45 page SIGTARP report as a pdf file - click here

I haven't had a chance to read the report yet - I just quickly scanned through it and it looks intriguing.
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Old 07-19-2010, 02:21 PM   #11
Txflyer
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I got to page 25 before I almost stroked out. A quote from a GM exec stating that removing a dealership would not save money for GM - that it would most likely cost GM money.

I'm logging out now before I go on a pre-retirement Ralph-like rage, but I'd like to see the people responsible held accountable. We all knew it was lies, and now the truth has come out.
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Old 07-19-2010, 03:29 PM   #12
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Default NADA declares defeat before the battle even begins

True to form, before the first shot is even fired the NADA waves the white flag to surrender. Here's an excerpt from Automotive News -
“I don't think we can do anything at this point; it would be like pushing toothpaste back in the tube,” said Ed Tonkin..."

In fairness, I don't know what options are available but why would the NADA give up on the first day without even putting up a fight?
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Old 07-19-2010, 03:45 PM   #13
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Originally Posted by Txflyer View Post
I got to page 25 before I almost stroked out. A quote from a GM exec stating that removing a dealership would not save money for GM - that it would most likely cost GM money.

I'm logging out now before I go on a pre-retirement Ralph-like rage, but I'd like to see the people responsible held accountable. We all knew it was lies, and now the truth has come out.
I had the exact same experience this morning. I started to read through the report and found myself getting angry - I knew I had to find a time to read the report when I was more relaxed.

Based on what I was reading this morning, it appears 80% of the $2 Billion GM was going to "save" was from reduced vehicle incentive payments. Their theory was fewer dealers means higher profits for the ones that remain thereby eliminating the need for incentives.
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Old 07-19-2010, 03:49 PM   #14
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“I don't think we can do anything at this point; it would be like pushing toothpaste back in the tube,” said Ed Tonkin..."

What do you expect from an association who’s vice chairman (stephen wade) was gifted a terminated Chrysler Dodge Jeep franchise and its chairman (tonkin) managed to keep one of the only stand alone Dodge stores. I've heard enough of "the train has left the station" and "the toothpaste is out of the tube" NADA needs to lead follow or get out of the way.
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Old 07-19-2010, 06:56 PM   #15
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Maybe the gifted dealers could join in the "shared sacrifice" and pay the dealer whose store was stolen.....kind of spread the sacrifice around.
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