Right now in Washington, D.C., we are seeing nothing short of the deconstruction of America’s free-market system. To be blunt, the strong arm tactics of the Obama Administration’s Auto Task Force are crushing the dreams of many American business owners – and simultaneously putting our future prosperity in jeopardy.
Over the past couple of weeks, I’ve spoken with the GM and Chrysler car dealerships from my district that have been targeted for total or partial closure by President Obama’s Auto Task Force. They were given no reason, and really no recourse to challenge their closure. It is as if someone threw a dart at a dartboard to decide which dealerships would be given a pink slip. In fact, we still do not know the formula used to determine which dealers would remain open, and which ones would close.
At one dealership in my district, the owner received an envelope from FedEx with a closure agreement inside, informing them that their highly profitable and nearly century-old business was slated for closure, and that they had twelve days to sign the agreement, or face the consequences.
Unbelievably, if they chose not to sign the agreement by the prescribed date, GM would not offer a warranty on any of the remaining cars on their lot. If they challenged the contract in court, the dealers would not only have to pay for their own legal fees, but GM’s as well, to the tune of $1,500 per hour – and that was whether they won or lost. And, even if they opted to sign the agreement, they were obligated to send GM their customer lists and service customer lists. It is a lose-lose deal for the owners who are taking it on the chin no matter what their decision.
As the owners stressed to me – tactics like this are not the America they know and love. Columnist Michael Barone likened the actions of the Obama Auto Task Force to the tactics of a “gangster government,” and I couldn’t agree more.
In crafting their deals, government trampled long-held legal principles. For instance, unsecured creditors, the United Auto Workers labor union, were jumped ahead of secured creditors, the teachers and police officers’ pension funds in Indiana, in bankruptcy court. Government shouldn’t be picking winners and losers. And, government certainly shouldn’t be ignoring established law simply because it suits their political ambitions.
It is unthinkable, but today consumers and businessmen aren’t deciding what cars should be manufactured or what dealerships should be successful or how much advertising is enough. Government is making these decisions.
Simply put, politics and business operate in different ways and are vulnerable to different influences as they strive to reach very different goals. Each Member of Congress in Washington is looking out for his or her own state or district's interests and sometimes that works against the interest of the company they are now essentially running. When Congress stepped into the Board Room, it set itself up to try to achieve two sometimes contradictory goals – protect their constituents and save this company. Government is simply ill-equipped to try to be both the governor and the governed – and it surely can’t do both well.
I am a proud cosponsor of the Automobile Dealer Economic Rights Restoration Act of 2009 that would honor a car companies previous commitments to local car dealers. I have written to both President Obama and Treasury Secretary Tim Geithner and asked them to reverse course. And, I’m looking into whatever legal options might be available for Congress to give these dealerships a fighting chance. These businesses are community landmarks, important job providers, and local economic catalysts. They deserve better treatment from their government than arbitrary pink slips that wipe out a lifetime’s work and investment.
The American Dream is in need of saving, and it’s up to all of us to work hard to save it.
Michele Bachmann represents Minnesota’s Sixth Congressional District in the U.S. House of Representatives.