Monday, May 18, 2009

NADA: National Auto Dealers Assassination

The fallout continues in the wake of last week's dealer reduction programs announced by Chrysler and General Motors. To the shock of some in the 'let them fail, it won't affect me' camp, thousands of closing dealerships will mean big job losses in communities and states with little or no automotive manufacturing base.

We tried to tell you.

In my opinion, the dealers are among the victims in this debacle, as are the small investors. To a large degree, the companies and the union are laying in the bed they made. I think I can make that case by citing one very illustrative example: the Jobs Bank.

True enough, the practice has finally been eliminated - in the face of bankruptcy - but for years the auto companies continued to pay people who no longer worked for them. What a deal, eh? Sit on your butt in the 'Jobs Bank', do no work of any kind, and get a check. The wizards of smart in the executive suites and board rooms actually signed off on the insanity.

Union leaders, who should have realized they were killing the golden goose, instead demanded ever increasing wages, benefits and control over business operations, while the corporations rolled over and took the abuse.

Unfortunately, the union wasn't the only group abusing our car makers.

It's an accepted canard that the United States has a free-market economy. We used to, but don't now and haven't for a long time. The federal government has been restricting, regulating and mandating the auto industry for years. It kept raising the stakes and no one in management had the spine to say 'I don't think so.' Instead, they submissively did as they were told and passed the costs on to the consumer, until they killed that golden goose, too. Now we have the President dismissing auto executives, a Federal Auto Task Force and Government Motors.

Atlas didn't shrug, he committed suicide.

I wish the auto dealers good luck in pleading their case, especially the Chrysler dealers who have been given six weeks to move six months worth of inventory before losing their franchises. Assassination indeed.

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