Bailout Watch 568: Obama: "The Dealer Cull Stays"

Edward Niedermeyer
by Edward Niedermeyer

Facing a House vote tomorrow on legislation that would repeal GM and Chrysler’s dealer cuts, President Obama is urging congress to not interfere with his auto industry restructuring. Automotive News [sub] quotes an Obama statement calling the cull “a critical part of their overall restructuring to achieve long-term viability.” The Obama statement alleges that “it would set a dangerous precedent, potentially raising legal concerns, to intervene into a closed judicial bankruptcy proceeding on behalf of one particular group at this point.” Because intervention on behalf of one particular group may only be done during a bankruptcy, by the government. Rep Steven Latourette, one of the bill’s sponsors, predicted that his legislation would pass the House “by a wide margin.”

“There is bipartisan sentiment that auto dealers got trounced when the Auto Task Force micromanaged an effort to save Chrysler and GM with billions of dollars of taxpayer help,” LaTourette said in a statement. “This was a chance for Congress to say you don’t get to crush state franchise laws, and you don’t get to put thousands of dealers out of business because you feel like it.” If the measure passes, it will move to the Senate, where a similar measure has 24 sponsors and co-sponsors. The battle rages on . . .

Edward Niedermeyer
Edward Niedermeyer

More by Edward Niedermeyer

Join the conversation
4 of 73 comments
  • Motownr Motownr on Jul 16, 2009

    I think it's time to wrap up my participation in this thread. My points are as a taxpayer who happens to be a part of the industry. I'm not looking for a single red cent from my government, or from any of you as my fellow taxpayer. I do think the facts matter, be they the fact that the termination issue was often a payback/payoff scheme, or the fact that the prospects for the surviving companies are based on some pretty flimsy scenarios. I think many of you have bought into downright falsehoods you've been fed by various sources. You can choose to believe what you'd like to believe, but I don't really have much of a vested interest in the situation. I care more about the principles than the principals. And the truth is not what you've been lead to believe. I've given you a few real-world examples, and can probably go on at length with more. What's going on with our tax dollars is ugly. Best wishes. See you on the next thread.

  • U mad scientist U mad scientist on Jul 16, 2009
    I’m not looking for a single red cent from my government, or from any of you as my fellow taxpayer. Yet the irony is that this is exactly what the bill is designed to do. It's the typical leverage for a cash grab dressed in the language of "free-market" economics. Cutting the dealers is a business decision plain and simple. The exact same thing would've happened if private owners took over (hell, they used private equity managers). Thus casting the "government" as the villain is an attempt to confuse simpletons. Remember, only some dealers are being cut, just as some plants and workers. These guys are obviously marketing themselves better. Imagine the mayhem if the UAW pushed congress to enact a law that made their contract immutable.
  • Ohsnapback Ohsnapback on Jul 16, 2009

    I'm not a Glenn Beck fan, and this is only tangentially related, so I hope the admin and mods will let it slide, but I have to post this for all to see - it's simply awesome, and has to do with Goldman Sachs relationship to government and the bailout/let fail phenomenon: An amazing theory An amazing video regards.

  • U mad scientist U mad scientist on Jul 16, 2009

    The problem with listening to crazy people is that they tend to mix the crazy in with the facts. The really funny part is that wingers like beck are generally always for policies that give the GS's of the world more power. Rants like that one do tend make you wonder whether he knows he's getting played. But all in all you have to applaud the fact that they finally figured out what "investment banks" do now that the guy they don't like is in office.