The Edsel was one of the biggest flops in the history of car making. Introduced with great fanfare by Ford in 1958, it had terrible sales and was junked after only three years. But if Congress had been running Ford, the Edsel would still be on the market.
That became clear last week, when Democrats as well as Republicans expressed horror at the notion that bankrupt companies with plummeting sales would need fewer retail sales outlets. At a Senate Commerce Committee hearing, Chairman Jay Rockefeller, D-W.Va., led the way, asserting, "I honestly don't believe that companies should be allowed to take taxpayer funds for a bailout and then leave it to local dealers and their customers to fend for themselves."
Supporters of free markets can be grateful to Rockefeller for showing one more reason government shouldn't rescue unsuccessful companies. As it happens, taxpayers are less likely to get their money back if the automakers are barred from paring dealerships. Protecting those dealers merely means putting someone else at risk, and that someone has been sleeping in your bed.
The Constitution guarantees West Virginia two senators, and Rockefeller seems to think it also guarantees the state a fixed supply of car sellers. "Chrysler is eliminating 40 percent of its dealerships in my state," he fumed, "and I have heard that GM will eliminate more than 30 percent." This development raises the ghastly prospect that "some consumers in West Virginia will have to travel much farther distances to get their cars serviced under warranty."
Dealers were on hand to join the chorus. "To be arbitrarily closed with no compensation is wasteful and devastating," said Russell Whatley, owner of a Chrysler outlet in Mineral Wells, Texas.
But unwanted events are one of the hazards of operating in a modern economy that is subject not only to changing consumer preferences but occasional downturns. Absent the Obama administration's rash intervention, Chrysler might well have gone out of business — in which case not only these dealers but all the rest would be left in the lurch.
Chapter 11 bankruptcy is not supposed to be pleasant for anyone.
It's supposed to involve painful and expensive sacrifices that are slightly less dire than the consequences of liquidation.
It should come as no surprise that as these corporations find fewer and fewer buyers for their products, they need fewer car lots. Today, Chrysler sells about half as many vehicles in this country as Toyota, but it has more than twice as many dealers.
Does Rockefeller get complaints from Toyota owners about the grueling trips to get service? Chrysler, by the way, admits that the average customer's drive to the dealer will increase — from 6.67 miles to 7.09 miles.
But once senators get the chance to micromanage business decisions, they are reluctant to pass it up. Sen. Kay Bailey Hutchison, R-Texas, proved that meddlesome government is not a Democratic monopoly. She proposed that Chrysler be forced to give its dealers 60 days to unwind their operations instead of less than a month, as the company decided.
Hutchison fondly recalled that when she was selling ads for the high school football program in her teen years, a car dealer provided the school's first sale. Retailers should be accommodated, she insists, because they have "nothing to do with the cost of the company."
But CEO Fritz Henderson, whose job, unlike hers, actually depends on knowledge of his company's cost structure, said the support GM provides to dealers amounts to about $1,000 per vehicle — a figure that would be lower with a downsized network. Cost aside, the companies say an excess of dealers means some can't make enough money to serve customers well, damaging their brands.
While lamenting the fate of the unfortunate dealerships that will be dropped, the senators overlooked another group that will be deeply affected by the closures — the remaining dealers. They can expect to capture more sales, boost their profits and even provide new jobs in sales and service.
One Detroit-area Chrysler dealer told a local newspaper that he plans to add at least 30 employees to his staff of 85. When that happens, don't expect a Senate hearing for them to express their gratitude.
Now that Washington has intervened to rescue these corporations, it can easily justify reviewing and even reversing their business decisions. But, as the senators proved, having the excuse is not the same as having the competence.
Steve Chapman blogs daily at newsblogs.chicagotribune.com/steve_chapman. To find out more about Steve Chapman, and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate website at www.creators.com.
COPYRIGHT 2009 CREATORS SYNDICATE, INC.
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Dear Steve Chapman, it's obvious our government can't find a 'needle in the haystack'! Running any kind of business, after they've borrowed trillions, without Taxpayers' consent, and can't account for even a penny, tells Taxpayers they all need to be shipped out of America, so Taxpayers can 'HIRE a President, Vice President, Secretary and Treasurer', as this 'VOTING' system is theirs for the taking and believe me, they've taken more than their share.
Taxpayers want Obama, immediately, to live up to his stated 'he'd go over line by line and eliminate the endless money pits!' Well, what's he waiting for? I'm sure since he has 'so much on his mind', like all Presidents since 1977, forgot the day they moved into the big house! What bothers Taxpayers about Obama is his excessive trips, the expensive vacation in Hawaii, the trips to New York and anywhere else. You'd think, somewhere along the line, that politicians would STOP and THINK, wouldn't you?
After watching this one (1) video-below- (there's many more on their endless lying and deceit meetings), Taxpayers are wondering how all these 'positions' got created for these 'directors, committees, inspectors, counsels, chief of staffs, deputy chiefs, policy directors and the list goes on an on! Taxpayers are wondering 'WHY ARE WE CONTINUING TO PAY ALL THESE PEOPLE, WHAT DO THEY ACTUALLY DO TO EARN EVEN A PENNY, AND WHERE'S THE MONEY COMING FROM TO PAY THEM NEXT MONTH?'
'Pair ready to tackle health care overhaul', states Ms. Sebelius and Ms. DeParle! Why haven't they already 'overhauled' this system! They've been around the DC block a time or two! Taxpayers say 'thanks, but no thanks - it's not needed - it's time to go back to 'PAY AS YOU GO' or else!' These seasoned politicians know it won't work. They have too much time on their hands. It's obvious this led Freddie, Fannie, HUD, AIG, Automakers, and anyone else taking Taxpayers' money, for endless money pits, into bankruptcy!
It's time to go back to the 'pay as you go' for doctors and hospitals! 'Fair Tax', to include property, should be top priority! Everyone must pay their share, including politicians! Otherwise, it's 'Discrimination against Taxpayers!'
Politicians salaries and retirements should be cut to $12,000.00 yearly! If this isn't acceptable, then Taxpayers will sell them a one-way ticket to the foreign country they sold America to, take assets to pay the trillions they've borrowed without Taxpayers' consent! After bankrupting America, these are the only options; unless, of course, they prefer to be sent to Guantanamoas some politicians are no better than the ones sitting in prisons; therefore, along with rest of killers, rapists, and thieves, of all races, this is where they need to be!
"Putting the cart before the horse"! When politicians took over, the Moonshiners' stills, for the revenue of course, started bottling, selling the booze, locking you up for drinking it, and furnishing a tax-paid attorney, clothes, medicine, and food. Exorbitant costs and an endless money pit for Taxpayers, wouldn't you say? Politicians, now, want to build infrastructures without having textile and manufacturing jobs in America! Another 'Cart before the horse' hare-brained scheme!
Taxpayers want Obama to live up to his stated 'he'd go over line by line and eliminate the endless money pits!' Well, what's he waiting for?
Shirley deLong
READ ON AND WATCH VIDEOs - LOCAL PRISONERS DON'T TELL THIS MANY LIES &, if they do, they aren't supposed to 'KNOW BETTER, RIGHT?'
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This it not political in any manner. However, all of us as taxpayers should be aware of the level of so called "over-sight" from the federal government. This is sad. Very sad for an inspector general not being able to answer simple questions that were ask with no pressure. No wonder our taxes will continue to rise as no one knows where the money is going, not even the so called inspector general of the Federal Reserve Bank. I guess it makes me want to wish April 15 would come sooner so I could help. Go to the bottom of this page to click on the you tube link. I think you will be taken back like I was too.
This is typical government oversight. She's clueless!!
Totally stunning… http://www.youtube.com/watch?v=cJqM2tFOxLQ&feature=channel
Sent: Monday, June 01, 2009 7:35 AM
Subject: FW: WATCH and listen to this...incredible!!
This is REALLY incredible!!! This is the Inspector General and she does not even understand the QUESTIONS, much less have an answer!!!!!!!!!!!!!!!!!!!!!!
Our tax dollars at work, looking out for the interests of our tax dollars. Wow!!!
Comment: #1
Posted by: Shirley deLong
Fri Jun 12, 2009 4:26 PM
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