Wednesday, July 15, 2009

Why can't some people get it?

The Obama freak parade continues on.Now he is opposing the idea of restoring the dealers forced to close on the grounds that it would be bad to intercede at this point.Huh?After his administration illegally negotiated the bankruptcy to begin with which rewarded his union cronies and left the other stakeholders holding the bag?

This issue has been covered in detail,but apparently some people still don't get it.Here is the link for the story.

To start with,the auto companies should have been allowed to completely fail last fall bailout free.The good parts would remain under new ownership and all of the old good buddy network would have been eliminated.The bankruptcies that Obama negotiated were simply for political payoffs for getting him elected.

The car dealers seem to be viewed improperly.Each one is a separate business or part of a dealer group.GM and Chrysler do not own a single car dealership.So the theory that closing a few thousand will somehow help to streamline operations is hogwash.You are simply forcing private companies to break their dealer agreement without merit.Some will go out of business and some will sell used cars or possibly go foreign,but that is beside the point.The "secret" process for selecting the dealers is very controversial and for good reason.It's not based on economics.It's another casualty of the political process.

The manufacturers will save some money indeed by no longer providing training,marketing,auditing and other types of support to these closed dealers.This exact number is unknown but rather insignificant in the big picture.Let's not forget this will also cause the workers who were providing these functions to also lose their jobs.

The largest point is can anyone provide any rational explanation for why having your product available in fewer markets will help you sell more product?The "less is more" motto is fine for certain things that you wish to increase demand for.Overexposure is bad for some things such as a celebrity.But when it comes to selling cars,you want it available to as many people as possible around the globe.You want your service network to be convenient and accessible for your car owners to utilize.No one wants an hour drive or more to have their car serviced.

If you believe that oversaturation of car dealers is an issue,ask yourself why these dealers haven't gone out of business already due to slow sales.Remember,they are not subsidized by the manufacturer,they must show a profit like any other business or they go under.

So,what do we have?No sound financial reason for this action.No legal authority for ignoring bankruptcy law and forcing bondholders to go to the back of the line.The Executive branch of our Government directly negotiating a bankruptcy proceeding.Binding,legal dealership agreements being torn up.Private companies being forced out of business.Political payoffs.The CEO's being forced out,but the UAW president remaining.

Looks like your standard criminal mob activity courtesy of our President.More to come...

No comments: