A new report is harshly critical of the Obama Administration’s efforts to have General Motors and Chrysler sharply cull their distribution networks as part of their bankruptcy reorganization plans, last year.
Together, the two troubled companies agreed to shed thousands of retail outlets across the country – something corporate managers had actually long wanted to do – in order to receive billions of dollars in bailout funds GM and Chrysler needed to survive.
But the White House’s automotive overseers failed to consider the potential impact such dealer cuts would have both on individual jobs and on the communities that the targeted retailers serve says the report, released by the inspector general for the Troubled Asset Relief Program. Also known as TARP, the program was initially created under the Bush Administration to help save the nation’s faltering banking industry. It was later tapped by the Obama Administration to salvage GM and Chrysler.
“Job losses at terminated dealerships were apparently not a substantial factor in the Auto Team’s consideration of the dealership termination issue,” declared the audit of the $787 billion TARP program prepared by auditor Neil Barofsky. But, it continued, “The fact that Treasury was acting in part as an investor in GM and Chrysler does not insulate Treasury from its responsibility to the broader economy.”