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Report criticizes auto dealership closings
WASHINGTON, Conn., The closing of thousands of automobile dealerships was, perhaps, ill-conceived, says a report by a U.S. official who oversees government bailouts.
Special Inspector General Neil Barofsky's report says tens of thousands of jobs vanished when General Motors Co. closed 2,000 dealerships and Chrysler closed an additional 789, The New York Times reported Monday.
Both automakers went through bankruptcy proceedings in the summer of 2009, emerging with $62 billion in Troubled Asset Relief Program funding, a $700 billion federal program that Barofsky is charged with monitoring.
"It is not at all clear that the greatly accelerated pace of the dealership closings during one of the most severe economic downturns in hour nation's history was either necessary for the sake of the companies' economic survival or prudent for the sake of the nation's economic recover," Barofsky's report says,
GM said it saved $1.1 million for every dealership it closed and now says it has a "stronger dealership network."
Chrysler has said it saved $45,000 per closing.
"The right-sizing of Chrysler's dealer network contributes to more profitable, better performing dealers and better customer service," Chrysler said in a statement.
WASHINGTON, Conn., The closing of thousands of automobile dealerships was, perhaps, ill-conceived, says a report by a U.S. official who oversees government bailouts.
Special Inspector General Neil Barofsky's report says tens of thousands of jobs vanished when General Motors Co. closed 2,000 dealerships and Chrysler closed an additional 789, The New York Times reported Monday.
Both automakers went through bankruptcy proceedings in the summer of 2009, emerging with $62 billion in Troubled Asset Relief Program funding, a $700 billion federal program that Barofsky is charged with monitoring.
"It is not at all clear that the greatly accelerated pace of the dealership closings during one of the most severe economic downturns in hour nation's history was either necessary for the sake of the companies' economic survival or prudent for the sake of the nation's economic recover," Barofsky's report says,
GM said it saved $1.1 million for every dealership it closed and now says it has a "stronger dealership network."
Chrysler has said it saved $45,000 per closing.
"The right-sizing of Chrysler's dealer network contributes to more profitable, better performing dealers and better customer service," Chrysler said in a statement.
