Peter Hodges, president of the Metropolitan Auto Dealers Association in Oklahoma City, OK wrote the following as a press release on October 18, 2012:
In President Obama’s October 13, 2012 weekly address he said broadly that the auto industry “was flat-lining” in 2008-2009 and on the verge of collapse. He was referring to Chrysler and General Motors as the “auto industry.” Yes, the auto industry was struggling. However, it is important to know that there are a total of 17 automakers that have 41 brands with over 17,000 dealerships that sell their automobiles in America. Two automakers out of seventeen do not make up the entire auto industry in the U.S.
The President said that “we refused to let Detroit go bankrupt.” Why would President Obama say this when he oversaw Chrysler and GM into bankruptcy? Chrysler filed chapter 11 bankruptcy on April 30, 2009 and GM filed chapter 11 bankruptcy on June 1, 2009.
The President said that, “auto sales are the highest they’ve been in four years.” But, he doesn’t say why. It is true that new auto sales are stronger today but, this is due to pent-up demand. What this means is consumers are simply making the new automobile purchases that they held off making in late 2008, 2009, 2010, and 2011. In metro Oklahoma City for example, compare those year’s new auto sales with 2007 (the last normal year for sales.) New auto sales were down -11.2% in 2008, down -31.6% in 2009, down -26.7% in 2010 and down -18.2% in 2011. Consumers held on to their cars longer than normal in those years because of a lack of confidence and lack certainty in the economy and marketplace. At some point, cars and trucks must be replaced. Since automobiles are in fact a need today, the consumer will replace their aging car or truck despite a prolonged bad economy. Therefore, auto sales have had a strong increase because of a simple need for reliable transportation and not because of confidence in the economy and marketplace. Metro OKC’s new auto sales in 2012 are estimated to be up 2.4% over 2007 due to pent-up demand.
President Obama said, “…we’re not just making more cars and trucks – we’re making better ones” and that “we” raised new fuel economy standards to “almost 55 miles per gallon.” Unfortunately, this political decision will also raise the cost of automobiles by more than $5,000 per vehicle.
What President Obama omitted from his address was that while he oversaw Chrysler and General Motors into bankruptcy he unnecessarily terminated over 2,200 new auto dealerships that were self-sufficient, family owned businesses. They were terminated under the false premise that they were an expense on their auto manufacturer. Terminated auto dealers cannot sell their closed properties and are still paying off mortgages on them. The dealership closures caused 120,000 dealership employees to lose their jobs. The President also took away the pensions of at least 20,000 automotive related workers in Ohio during these bankruptcies. This injustice of dealership terminations was recognized by President Obama’s Special Inspector General on TARP, Neil Barofsky, who stated in an interview on CNBC in regard to his report on dealership terminations (SIGTARP) that, “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.”
Link to President Obama’s Weekly Address video here: http://www.whitehouse.gov/blog/2012/10/12/weekly-address-one-million-american-jobs-saved-and-stronger-american-auto-industry
The auto dealers association position is my profession. The National Association of American Lay Catholics is the organization I founded to act on my passion to defend the Catholic Church with other Catholic lay persons.
O Holy Spirit, strengthen us to defend all that is holy.
Peter L. Hodges Sr.