Last year, while the Obama administration seized two of the nation’s three main domestic auto manufacturers, it also shut down thousands of dealerships across the country, supposedly to stabilize GM and Chrysler. A new report from Neil Barofsky, the Inspector General of the TARP program, calls into question that decision. In a sharp rebuke to the White House, Barofsky says that the action needlessly cost tens of thousands of jobs and extended an already-disastrous downturn in employment:
President Obama’s auto task force pressed General Motors and Chrysler to close scores of dealerships without adequately considering the jobs that would be lost or having a firm idea of the cost savings that would be achieved, an audit of the process has concluded.
The report by Neil M. Barofsky, the special inspector general for the Troubled Asset Relief Program of the Treasury Department, said both carmakers needed to shut down some underperforming dealerships. But it questioned whether the cuts should have been made so quickly, particularly during a recession. The report, released on Sunday, estimated that tens of thousands of jobs were lost as a result.
“It is not at all clear that the greatly accelerated pace of the dealership closings during one of the most severe economic downturns in our nation’s history was either necessary for the sake of the companies’ economic survival or prudent for the sake of the nation’s economic recovery,” the report said.
Mark Tapscott says that Rep. Darrell Issa (R-CA) and his consistent criticism of the dealer closings has been vindicated:
via Hot Air » TARP audit claims Obama admin destroyed “tens of thousands” of jobs in dealer closures.