• Apr 5, 2010
One of the most contentious aspects of General Motors' 2009 bankruptcy was the forced closing of 1,160 dealerships across the country. GM brass and the Obama Administration Task Force insisted that a smaller dealer body was necessary to make the Detroit, MI-based automaker viable again, while also helping to make the remaining dealers stronger. Opponents of dealer closings pointed to the thousands of dealership employees who would lose a job at a time when jobs are harder than ever to find. Dealers are also often among the most powerful small business owners in small towns, and that meant that the local congressmen were put in a tough spot, indeed.

Congress was able to appease its constituencies to a point by pushing through legislation that gave dealers a second chance at life. Ultimately, it looks like 661 GM dealers have been given a new lease on life after going through the arbitration process, which, it seems, would make the National Automotive Dealers Association mighty happy, but The Detroit News reports that recent comments from President Obama have NADA spokesperson Bailey Wood hopping mad.

The President reportedly gave The General a pat on the back for reinstating the 661 dealers, adding "a year later, GM is hiring again, on the verge of reopening hundreds of dealerships." President Obama brought up the dealer reinstatement in part to show that the U.S. government's $50 billion loan was the right thing to do. But Wood was upset that President Obama would bring up the dealers after the administration spearheaded the effort to cut dealers in the first place. Even as the legislation that led to the arbitration process was taking hold, the administration was reportedly against the bill.

Does NADA have good reason to be upset over President Obama's comments? Maybe, but we're thinking the dealers NADA represents would have been in much worse shape had the administration not stepped in and bailed out GM in the first place. It's hard to sell cars when no one's making 'em.

[Source: The Detroit News | Image: Mark Wilson/Getty]


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  • 13 Comments
      • 4 Years Ago
      NADA has a selective memory, they were the first to publically support GM's dealer terminations on GM's dealerworld website back in June 2008 within the body of GM's original announcement to its dealers from Mark LaNeve.
      • 4 Years Ago
      Perhaps NADA was really angry at Obama for the way he handled the GM and Chrysler bailouts. Instead of letting both companies restructure with help ( Gov $) AFTER bankruptcy, he forced both companies to give a sizable share of equaty to the UAW. Now both GM and Chrysler will be wards of the state for years. They will have a difficult time in becomming a profitable, vibrant companies that they could have been if they were allowed to get away from the UAW. Now UAW owns them !!!! Good job Obama !!
        • 4 Years Ago
        ThinkFree: All you monday morning Q-backs, did nothing to help the struggling automakers, as a matter of most of you wanted them to fail, just so you could whine about unemployment.

        It was the right thing to do then, and "upon further review", reinstating SOME dealers may be the right thing to do now.

        You folks complain about unemployment, and now you complain about people getting jobs.

        Some days I really wish that John McCain (Grumpy Old Man) had won the election. They country would be MUCH worse off than it is today. Just so you know you would have upgraded from a "C" Average president to a "C+" average president with a "D-" minus Sarah Palin just a heartbeat away.
        • 4 Years Ago
        Oops!! My bad, a smart thinking president who advocates on behalf of the masses is bad for big business. What on earth could Obama be thinking?

        America really does like her presidents to be mindless twits, who do as they are told, as long as it's benefits the wealthy. Sister Sarah - 2012 (the poster girl for mindless twits).
        • 4 Years Ago
        The equity was given to the UAW in lieu of the VEBA payment. The VEBA payment was scheduled before Obama was elected to office. It was negotiated as part of the UAW/GM contract in 2007.
      Carlos
      • 4 Years Ago
      What else is new? Obama has gone back on quite a few things he said. Anyone remember when he said we needed to remove troops from Iraq and Afghanistan? Yeah well if I recall correctly he's send more troops to those places. Anyone who believes that Obama is for the small man is delusional.
        • 4 Years Ago
        @Carlos
        You don't recall correctly. He said that we need to draw down in Iraq so that we could build up and finish the job in Afghanistan, which is exactly what he has done. You're of course entitled to your political opinions, but try to get your facts straight.
        • 4 Years Ago
        @Carlos
        Thank you for being the first person to understand the hipocricy of what the Obama administration does. They praise or take credit for everything that seems like a public win, even if they fought heavily against it. They do a ton of PR and very little work.
      • 4 Years Ago
      Just another case of someone trying to talk out both sides of their mouth. Some people are never happy. And you wonder why little ever REALLY gets done in this country. You can't do anything without making somebody angry.
      • 4 Years Ago
      "But Wood was upset that President Obama would bring up the dealers after the administration spearheaded the effort to cut dealers in the first place."

      Sorry dude, but this was a necessary evil (sometimes not so evil.)

      There were too many dealers for the company and they were way too protected by the states. Wood is just upset the dealer-friendly state laws that he helped lobby for, were temporarily suspended through bankruptcy.
        • 4 Years Ago
        "Remember these Dealerships are privately owned businesses caught up in a government takeover of a publicly traded company, and do not cost the manufacturer anything."

        Also remember that you greatly benefit from the state franachise laws that benefitted you in the short term and screwed GM in the long term. Government doesn't seem so bad in this case does it? If a dealer is bad or underperfoming, GM should be able to cut it off. It's too bad from here on out, GM will again be powerless to rid itself of the bad and underperforming dealers who undercut the good ones.
      • 4 Years Ago
      The kool-aid drink you refer to is a "People's Temple" invented by Jim Jones. Give credit where it is due. This all has to do with making a decision. What may not be a politicly correct decision today may be tomorrow. This reminds me of a certain war where decisions were made every night after the evening news would air.
      • 4 Years Ago
      It is a common political move - praise one action (that would help GM keep a higher transactional price), then praise the opposite for a different reason (jobs) when the voters start railing against their failing governance.

      IMO the NADA dude was correct in pointing out the hypocrisy, but he will never win against the giant PR-spin machines in the duopoly. The dealer reinstatements were not forced, it proves how well the taxpayer funds were spent in getting GM quickly turned around (though they still have glaring product holes and their most important models not even out yet). Next would have been that the jobs program allowed this to happen, or proof that the economy has really turned around fast.

      I would be upset with the voters if they buy this crud. From ANY politician that says it.
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