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SIGTARP: Factors Affecting the Decisions of General Motors and Chrysler to Reduce Their Dealership Networks

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Office of the Special Inspector General for the Troubled Asset Relief Program: Factors Affecting the Decisions of General Motors and Chrysler to Reduce Their Dealership Networks, July 19, 2010

  • “At a time when the country was experiencing the worst economic downturn in generations and the government was asking its taxpayers to support a $787 billion stimulus package designed primarily to preserve jobs, Treasury made a series of decisions that may have substantially contributed to the accelerated shuttering of thousands of small businesses and thereby potentially adding tens of thousands of workers to the already lengthy unemployment rolls — all based on a theory and without sufficient consideration of the decisions’ broader economic impact…In response to the [Treasury Department] Auto Team’s rejection of their restructuring plans and in light of their intervening bankruptcies, GM and Chrysler significantly accelerated their dealership termination timetables, with Chrysler terminating 789 dealerships by June 10, 2009, and GM announcing plans to wind down 1,454 dealerships by October 2010…Job losses at terminated dealerships were apparently not a substantial factor in the [Treasury Department] Auto Team’s consideration of the dealership termination issue.”
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