Wednesday, June 03, 2009

Obama shutting down car dealerships. Why?

President Obama and his Auto Task Force troopers have ordered GM and Chrysler to close down dealerships. I don't think it's a political move to hurt dealerships owned by Republicans, though apparently the majority of the dealerships being closed are in fact owned by Republicans. No, it seems to me that this is a move to drive the price of GM and Chrysler products up. Less dealers equals less cars available equals more expensive cars. If this move had been contemplated by a President Bush task force there would be a nationwide call for investigations and a special prosecutor. All we hear now is....NOTHING! Honest, hard working folks are being driven out of business, forced to lay off employees and dump products at liquidation prices and there is not a peep from anyone. Amazing.

In this ... ...fair and balanced news report from FOX GM and Chrysler executives say "We must slash dealerships if we are to survive...". How's that work? Well GM pays billions of dollars a year to the dealerships. Or not! Dealers pay the auto manufacturers for the products they sell. Not one dime of GM's money goes to the dealerships.

So how is this going to help them "survive"? "that there are too many dealers and the networks date from the 1940s and 1950s when motorists lived farther apart and Detroit automakers led the world in sales." says the head of GM. Do you suppose he is trying to say that the problem is that the dealerships are not paying for the cars they buy? Ask Peter Lopez, who owns dealerships that sell both GM and Chrysler (bet he wishes he'd gone with First On Race Day FORD). "I have met every financial obligation put forth by Chrysler and GM... Now ... they want to shut me down. What gives the government the right to do that? I'm a taxpayer and they're getting taxpayer dollars. It just doesn't add up." He's right, it doesn't add up. Maybe the problem is how "old" the dealerships are. Let's hear from Russell Whatley, "a Chrysler-Dodge-Jeep dealer in Mineral Wells, Texas". Russell said "his grandfather opened the business in 1919. 'A 90-year investment is just gone, and neither my family nor my employees have any say about it'."

If these two Dealers don't "get it", and the Obama supporting free American press does not get it, who does? I do.

You see friends, there were less Dealerships (when you had to drive farther to buy a car) it was better for the manufacturers because they could charge you more. It's called "Supply and Demand". GM and Chrysler are selling less cars at more dealerships. They need to sell more cars, and really don't care how many dealerships it takes to do it. But Obama knows that when the new GM's and the Fiat/Chrysler cars hit the market, the fewer places one can go to buy one the more they can charge. They are manipulating the free market to increase their sales. Don't be surprised if the next thing you see Obama doing is creating rules that hurt Ford (as well as Toyota and others) and help GM/Chrysler. Oh wait, he already did. He has raised the CAFE standards to 30mpg or something like that, and ordered Chrysler to use Fiat small car designs, putting Ford behind the 8 ball from the get go. That's not a problem though because the only reason he did it is to save the environment, and we all want that...right?

Isn't conspiring to drive up prices is illegal?

But this is not Obama's first illegal act as President, nor will (I assume) be his last. He coerced the auto manufacturers Bondholders to take less than they deserve through Bankruptcy and gave it to the UAW. That sort of coercion is called "Extortion" when the Mafia does it. But when Obama does it it's called "The smartest economic move ever by the smartest most elegant, not to mention handsome and cool, man who ever walked......."

This world is upside down and things will get worse. But that doesn't mean we should all lay down and let these folks break our knee caps. These closed dealerships should fight back. They should open other dealerships and their advertising should be along the lines of "GM and Chrysler STOLE FROM US AND OUR EMPLOYEES. Show them it matters. Buy a car from us"

I'd buy one.