FedUpUSA

Archive for the ‘Chrysler’ Category

The Obama administration, already under fire for unprecedented allegations of racial bias, faces a new bias claim from a most unlikely source: one of the administration’s own inspectors general.

Decisions on which car dealerships to close as part of the auto industry bailout — closures the Obama administration forced on General Motors and Chrysler — were based in part on race and gender, according to a report by Troubled Asset Relief Program Special Inspector General Neal M. Barofsky.

[D]ealerships were retained because they were recently appointed, were key wholesale parts dealers, or were minority- or woman-owned dealerships. [Emphasis added.]

Thus, to meet numbers forced on them by the Obama administration, General Motors and Chrysler were forced to shutter other, potentially more viable, dealerships. The livelihood of potentially tens of thousands of families was thus eliminated simply because their dealerships were not minority- or woman-owned.

As has been widely reported, the Inspector General’s study skewered the Obama Gang for strong-arming the companies into closing 2,000 dealerships, costing an estimated 100,000 people their jobs during a recession.

But the news media has ignored key elements of Barofsky’s report — elements that are far more damaging, if possible, to Obama. As we reported earlier in the week, a top Obama official, manufacturing czar and “Auto Team” leader Ron Bloom admitted that the dealerships could have been kept open, saving those jobs, “but that doing so would have been inconsistent with the President’s mandate for ‘shared sacrifice.’”

Barofsky says the administration insisted on the closings even though a GM official told him

that GM would usually save ‘not one damn cent’ by closing any particular dealership. … Furthermore, a GM official stated that removing a dealership from the network does not save money for GM — it might even cost GM money — and that savings cannot be attributed or assigned to any one dealership.

And a reading of the IG’s study makes plain that some dealership closings forced by the administration were based largely on politics.

The report is highly critical of how dealerships were selected for closure, or termination. Barofsky notes that

experts said that while metro areas were oversaturated with GM and Chrysler dealerships and reductions were needed in these areas, this was not the case in rural areas where GM and Chrysler had an advantage over their import competitors. [...]

Although sales volume in small towns may be lower, the cost of operating dealerships in small towns is lower as well.  In addition, closing dealerships in small towns could ruin the “historic relationship” that GM has had with residents in small towns and force buyers to drive to metro areas, where there are more competitors. In the worst case, the loss of market share in small and medium-sized markets could “jeopardize the return to profitability” for GM and Chrysler, the (the Center for Automotive Research) representative said.  Representatives from the National Automobile Dealers Association also concurred that dealership terminations would cause GM and Chrysler to lose market share in rural areas. [Emphasis added.]

Nevertheless, as Barofsky notes, “ultimately close to half of all of the GM dealerships identified for termination were in rural areas.”

That is where raw, hard, sewage-filled Chicago politics came into play.

Records indicate that in 2008, Obama lost the vote totals in the nation’s 1,300 rural counties by nearly 80%.

The Obama administration’s insistence on radical numbers of closures ended up shuttering dealerships in those rural areas disproportionately, while dealerships and jobs in metro areas — Obama’s geographical base — were left open.

Additionally, it has been widely theorized that dealers targeted for closure as a result of Obama’s interference were predominantly those who donated campaign contributions to Republicans. Although evidence to date is largely anecdotal, given what we’ve already reported about the Obama administration’s handling of the auto bailout, such speculation does have considerable grounds for support.

While that last point is leaves room for debate, the details contained in the Barofsky report are not. As Barofsky points out, the Obama administration was given an advance copy, and “Treasury [the Obama Treasury Department] might not agree with how the audit’s conclusions portray the Auto Team’s decision making or with the lessons that SIGTARP has drawn from those facts, but it should be made clear that Treasury has not challenged the essential underlying facts upon which those conclusions are based.”

Included among those undisputed facts:

-”[D]ealerships were retained because they were … minority- or woman-owned dealerships”;

-Thousands of jobs were lost, unnecessarily, due specifically to Obama’s “mandate for shared sacrifice”;

-A disproportionate number of Obama-forced closings were of rural dealerships, in areas unfriendly to Obama, even though such closures could “jeopardize the return to profitability” for GM and Chrysler.

The media, of course, remain mute about these serious allegations in the Barofsky report. They have limited their coverage to the job loss numbers and tried to place the blame on Treasury Secretary Turbo-Tax Tim Geithner.

Before long, we’ll be reading that it was somehow Bush’s fault.

Left Lane News reporting on the UAW and Ron Gettlefinger:

UAW Chief: Workers Can’t Afford Own Products

By Andrew Ganz

 

United Auto Workers union chief Ron Gettelfinger indicated yesterday that the $14 per hour base wage earned by an entry-level worker building Chrysler, Ford and General Motors products isn’t enough to buy a new car.

The argument comes nearly 90 years after Henry Ford began paying workers $5 per day in hopes that the workers would be able to afford one of their own products, a Ford Model T.

Gettelfinger said that it’s a “fair question” whether or not auto workers can afford the products they’re assembling. An economist for Comerica, Dana Johnson, confirmed Gettelfinger’s comments by saying that a single income UAW worker making $14 per hour probably can’t afford a new car.

But a dual income family? “Then they could clearly afford a new car,” Johnson told the Detroit News.

The UAW negotiated the $14 hourly rate in 2007 and, despite his concern that workers can’t live up to the standard promised by Henry Ford, Gettelfinger nonetheless defended the concessions. More tenured workers earn more than double the $14 hourly rate.

We did what we had to do to get to tomorrow,” Gettelfinger said.

Awwww…..I feel so sorry for them.  Well, guess what?  The REST of us can’t afford your products either and it isn’t OUR fault they’re so expensive.  Ironically, it is the UAW’s fault.  The $14.00/hour for an ENTRY-level position on the line is the SAME wage that my husband, a carpenter with 25-years of experience makes when working for one of the big national builders.  It is just slightly lower than the $17.00/hour he can make with some smaller companies or on his own right now.   Also, it is MORE than my husband is currently making employed in the IT department for Hewlett-Packard. 

That being said, it is the UAW themselves that have played no small part in the precipitous increase in the cost of automobiles that has far surpassed any increase in wages.  However, none of us non-union workers in the private sector can just hog-tie entire industries and force them to cave into our demands, nor can we go cry to Congress and mandate a bailout of our respective industries.

So, to Mr. Gettelfinger I say, it’s just too ironic that the UAW has priced themselves right out of being able to purchase the cars they manufacture.  Welcome to our world.  Those of us out here trying to earn a living without government subsidies and favors and without holding our employers hostage to our demands can’t afford your cars either.  Wonder what happens when the price of cars gets to be so out of whack with incomes that no one can afford them?  The UAW will probably demand more money.  That’s what.