As a Catholic who works in the trade association profession in the auto industry it was unsettling to hear President Obama claim that he saved the auto industry. President Obama closed over 2,200 auto dealerships, which caused the losses of decades old family-owned businesses and over 120,000 jobs they provided. The closures were allowed to happen under the false notion that auto dealerships were an expense on their auto maker. The President ignored the fact that auto dealers are not an expense to automakers. Auto makers own none of what you see at auto dealerships. Auto dealers own all their property; the cars and trucks, parts, buildings, land, signs, everything. The dealerships pay their employee’s salaries and millions of dollars in taxes to state and local governments. The manufacturer has nothing to do with any of these things.
- President Obama purposefully and unjustly took away 2,200 self-sufficient, family owned businesses under the false premise that they were an expense on their auto manufacturer. He deliberately put these people in debt with no way to recover. Auto dealers still cannot sell their closed properties.
- President Obama’s decision to close dealerships cost 120,000 persons their jobs and livelihood.
- The President’s action defrauded auto dealers of their property rights and their employees of their wages.
- See SIGTARP Report summary (page 2) for confirmation of these facts
**********[UPDATES to this post were made October 5, 2012. Updates are surrounded by red brackets and asterisks**]
[The video below is of the Special Inspector General speaking about the Auto Task Force's (Obama's) handling of the auto dealers. This was Obama's own Inspector General, Neil Barofsky. He gets to the point quickly in this 9 minute video:
Click on the video below. Barofsky states in the video:
"This (Obama's) Auto Team... didn't have a single person on it who had any auto experience... We asked Ron Bloom, the head of (Obama's) Auto Team, was this (dealership closures) necessary... and he acknowledged that this... wasn't necessary."
Below are important excerpts from the summary page (pg. 2) of the SIGTARP Report (Office of the Special Inspector General (Neil Barofsky) for the Troubled Asset Relief Program):
- "GM and Chrysler significantly accelerated their dealership termination timetables, with Chrysler terminating 789 dealerships by June 10, 2009, and GM announcing plans to wind down 1,454 dealerships by October 2010."
- "(Obama) Auto Team’s view about the need for GM and Chrysler to reduce their dealership networks and do so rapidly was based on a theory that, with fewer dealerships (and thus less internecine competition), like their smaller networked foreign competitors, the remaining dealerships would be more profitable and thus would permit the dealerships to invest more in their facilities and staff."
- "one expert opined that closing dealerships in an environment already disrupted by the recession could result in an even greater crisis in sales... job losses at terminated dealerships were apparently not a substantial factor in the (Obama) Auto Team’s consideration of the dealership termination issue."
- " it is clear that tens of thousands of dealership jobs were immediately put in jeopardy as a result of the terminations by GM and Chrysler. Finally, the acceleration of dealership closings was not done with any explicit cost savings to the manufacturers in mind."
- "Treasury should have taken special care given that the (Obama) Auto Team’s determinations had the potential to contribute to job losses, particularly given that one goal of the loan agreements was to “preserve and promote jobs of American workers employed directly by the automakers and subsidiaries and in related industries.”
- "This audit concludes that... (Obama) Treasury (a) should have taken every reasonable step to ensure that accelerating the dealership terminations was truly necessary... (b) should have at least considered whether the benefits to the companies from the accelerated terminations outweighed the costs to the economy that would result from potentially tens of thousands of accelerated job losses."
See SIGTARP Report summary (page 2) for confirmation of the above excerpts and facts.]**********
The President’s actions against auto dealers violated the Catholic social teaching principles of social justice and the common good by removing owners rights to their property and defrauding workers of their wages. His actions (he calls it “shared sacrifice”) were an example of collectivism, centralized planning and socialism. All of these ideas are rejected by America and all are rejected by Catholic teaching in regard to the commandment, “thou shall not steal.”
Many people have forgotten what damage President Obama did to the auto industry and the auto dealer and their employees. Please remind them.
Peter L. Hodges Sr.