General Motors to reconsider closings dealerships under deal with Congress

Posted Dec 3rd 2009 5:00PM by Zac Bissonnette
Filed under: General Motors (GM)

In a terrifying instance of politically-motivated government intrusion into what should be a business decision, General Motors has agreed to reconsider its decision to close dealers as part of an agreement to stop Congressional legislation that would have required GM to keep dealers open.

GM has said it plans to shut 2,400 of its 6,000 dealerships as part of a plan to cut costs and streamline operations.

But back in June, Congress started second-guessing the decision and now it looks like GM will have reconsider a business decision because a Congress has decided to appease a very powerful lobbying group: car dealers.

Here's the issue: as the largest shareholder in GM, the government has a fiduciary responsibility to taxpayers to maximize the value of that investment -- and caving to special interests and forcing GM to make decisions that aren't in the company's best interests is a clear cut case of dereliction of duty.

Over the past decade, car dealers have donated $13 million to U.S. political campaigns -- outspending all but two industries.

Do you think that could possibly have something to do with why the U.S. taxpayers are being told they have to keep unprofitable dealerships open for the benefit of car salesmen?

Tags: auto industry, car dealers, featured, General Motors, GM, inthenews

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Reader Comments (Page 1 of 1)

12-04-2009 @ 5:25AM

al coholic said...

Unfortunately we've gotten ourselves into a situation where the decisions about free entrerprise are being made by politicians, nearly every one of which votes in a way that will allow him to become re-elected by his local constituants. This ensures that there will be no objectivity and sets a very bad example for future economic policy.