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]