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Thursday, May 28, 2009
By Steven L. Taylor

The theory (and I use the term loosely) that the Obama administration has used its political might to punish Republican-owned Chrysler dealerships and reward Democrat-owned dealership continues to swirl (indeed, one blogger called the administration’s approach to the auto industry bailout in general to be the “most underhanded use of the federal government since the Teapot Dome Scandal”-a comparison that may be in the running for Hyperbole of the Year). At any rate, let me jump into the whirlpool of conspiracy and scandal and ask: what would be the motivation for the Obama administration to go out of its way to close dealerships whose owners donated to the GOP? It just strikes me as a power play that would make no sense whatsoever, given the enormous risk of being caught versus rewarding/punishing a very small number of political donors. It doesn’t make any sense.

I certainly am not one to think politicians to be above petty or vindictive behavior, but I expect them to actually think that they will get something out of said behavior. In this case the payout is rather vague, to put it mildly.

I will agree that it is difficult to fully understand the exact logic of the dealership closings, making conspiracy theories appealing, but this is ultimately pretty thin gruel.

Filed under: Uncategorized | Comments/Trackbacks (9)|
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9 Responses to “Another Thought on “Dealergate””

  1. Anon Says:

    Presumably, these were business decisions. As such, there are probably some general criteria, but I would not be at all surprised if there were also a lot of exceptions. I can understand why Chrysler would be reluctant to reveal a lot of details, simply because they don’t want the hassle of the entire Republican party questioning every decision.

  2. Shakes Says:

    Since the government owns Chrysler, shouldn’t the answers be forthcoming? What about sunshine and transparency?

  3. Ted Craig Says:

    Given the strong Reoublican bent among car dealers, it’s mostly just a law of averages. And the closings make sense if you understand the modern auto retail business. It come down in many cases to big dealer groups vs. mom and pop.

  4. Blake Says:

    “I will agree that it is difficult to fully understand the exact logic of the dealership closings”.

    I’m glad you add that sentence. Because even if the “law of averages” argument pans out there are other problems.

    I struck me that if the percentage of dealerships were reversed and they were much more bent towards Democrats, particularly Obama, that the Administration would have gone out of its way nix these closings. My understanding is that these closings were not Chrysler’s idea.

    I also think there needs to be a look at some of the dealerships that were saved, and in particular “protected” — by “protected” I mean dealerships that were allowed to merge and have competitors cleared out.

    Unlike the “law of averages” analysis, it would be so easy to catch officials in these areas.

    And in the end, it never hurts to let government employees, including the President, know they are being watched regardless of party.

  5. Blake Says:

    Correction: Unlike the “law of averages” analysis, it would NOT be so easy to catch officials in these areas.

    Forgot NOT — (Wrong word to leave out)

  6. Steven L. Taylor Says:

    I am more than happy for politicians to be aware that they are under scrutiny. Indeed, the more scrutiny, the better.

    However, I continue to maintain that the issue with “dealergate” is an utter lack of understanding by a vast number of people about how one should approach a given set of numbers and then how to analyze them.

    Beyond the almost certain fact that dealers are more likely to be Rep than Dem, there are not doubt any number of other variables that are unknown/being ignored in this discussion.

  7. Blake Says:

    Well okay.

    I guess I was proposing that the term “Dealergate” could refer to a broader issue. The overall policy could have been partisan.

    If you have a group that you can snuff out, and it is 88% Republican, you are assured of taking out more Republicans than Democrats, even if you analyze each individual dealership with objective criteria during your purge.

    If 88% of dealerships were Democrat, would this policy be in place at all?

    I suspect not.

    Excessive numbers of dealerships is an issue, but it is hardly the reason Chrysler cannot make a profit. I don’t know of anybody in the industry who understands why these closings are being given a priority and more importantly why it is being done in one fell swoop.

    The notion that it was done for partison reasons should be explored.

  8. Steven L. Taylor Says:

    If 88% of dealerships were Democrat, would this policy be in place at all?

    Well, yes, I think it would. The operative issue here is Chrysler’s financial state, not the partisan affiliation of the dealers.

    The thing that seems to be forgotten at times by some is that Chrysler is in lousy financial shape and went the government for help-it isn’t as if the Obama (or Bush) administration went looking for a reason to get involved with Chrysler.

  9. greghughes Says:

    well, there are some sticky wickets like this one:

    http://directorblue.blogspot.com/2009/05/closing-chryslers-dealerships-readers.html

    four democratic contributors have their 40 dealerships amazingly transformed into 42 dealerships.

    weird! any they happen to be the biggest democratic contributors on the entire dealer list.

    and one of them is already in a bunch of legal and financial hot water.

    wow, it’s strange how that happens!


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