Since we last checked in, here are the latest developments in the rope line of strange occurrences Doug Ross has dubbed Dealergate (Some bloggers prefer Mopargate, but many non-motorheads won’t get it. Dealergate it is).
In another of the many pesky coincidences to be found in this story, car czar Steven Rattner, the real head of President Obama’s auto task force, is married to Maureen White, a former fundraising chair for the Democratic National Committee. Need dealer donor data? No problem…
Is the Obama administration punishing Chrysler dealers for their politics? A preliminary analysis by Doug Ross suggests that could be the case.
There were too many things about the selection of dealerships to be closed that just didn’t add up. Some of the dealers chosen to be terminated were among the more successful outlets in the Chrysler dealership network, and many of them had been loyal Chrysler and Dodge agents who had maintained an excellent working relationship with the Detroit automaker for decades.
Some dealers who got a thumbs down from Obama’s automotive panel told compelling stories about their situations that raised doubts about the process of selecting them for closing. One example, a dealership in Alvin, Texas, had increased its new car sales by 50% in the first four months of 2009, while other MOPAR dealers’ sales were in the tank. Another in Melbourne, Florida, had, at Chrysler’s insistence, totally renovated its facility financed by incurring millions of dollars of debt in the form of a bank mortgage. The are just two of many stories which highlight the incongruities to be found on the list of dealerships not deemed worthy to remain in operation.
The Washington Times:
Dealers from across the country lobbied desperately on Capitol Hill on Wednesday on the eve of bankrupt Chrysler’s expected announcement that it will close 800 of its 3,200 dealerships. GM is expected to close 2,600, or 40 percent, of its 6,300 dealerships
As part of their plans to get taxpayer-funded bailouts from the Obama Administration, GM and Chrysler both had to promise to sharply reduce the number of dealerships across the country which sell their products. But this is mostly smoke and mirrors. Too many dealerships is not even one of the more serious ailments which afflict the two car makers.
