"Trust us," our federal government says. The economy is in pieces, the eagerly anticipated recovery remains imperceptible and now we are asked to believe that expanded government should run our major businesses. Please take a closer look.
Last week General Motors filed for financial reorganization through bankruptcy. After a massive infusion of bailout (taxpayer) money, the ailing giant is now under government control. The head of GM was pushed out by the federal government and the board of directors was revamped to include key political advisors.
Senate hearings on this subject last week included testimony from the chairman of the National Auto Dealer's Association (NADA), Mr. John McEleney, who asked the senators why more than 2,000 auto dealerships across the country are being forced to shut down. Mr. McEleney said, "Dealer cuts won't save any money because dealers don't cost the manufacturer any money."
USA Today quotes Mr. McEleney saying, "With a total lack of public transparency or justification, the White House auto task force -- an unelected panel of advisers with no automotive experience -- told General Motors and Chrysler on March 30 that they needed to move more aggressively to cut an excess of dealers. And for what? Dealers are not the problem. More than $80 billion of federal money will be going to GM and Chrysler, with no one yet able to explain exactly how the money is to be spent."
The dealerships are privately owned, but the White House Auto Task Force is mandating they must close. And the Chrysler dealers, some which have been profitable for more than 50 years, were given only 26 days to shut down. These massive government dictates will cause the loss of more than 100,000 jobs.
So what about the survivors, the "go forward dealers?" They are allowed to stay in business but there are huge strings attached. Each surviving dealer must sign a contract, the terms of which are enough to make any freedom lover squirm. The devil really is in these details. Here's what Mr. McEleney reported about the contract for his GM dealership in Clinton, Iowa: "If I sign it, I will be committing my business to spend hundreds of thousands of dollars that I know about today, and committing to millions of dollars in potential financial obligations in the future ... Even worse, GM can alter the terms of these requirements at any time at its sole discretion. The final blow: I must waive any right of protest to any action taken by the manufacturer."
Is this the United States of America? People must waive their right to protest in order to be allowed to stay in business? The chair of the National Auto Dealers Association went on to say that "This entire bankruptcy has been negotiated by the Executive Branch" of our government.
The Auto Task Force also issued an order to bypass state auto franchise laws. These laws have been hammered out in each state over the past 40 years to include protections for both consumers and dealers. But now, with a wave of their hand, the Auto Task Force has rendered state law impotent. The franchise laws require, among many other things, that the manufacturer buy back all the cars, parts, signs, etc. if they force a dealer to close. The White House Auto Task Force didn't want to be held to those rules.
How can the rights of these businesses, and consumers expecting product warranties, be so quickly and casually trampled? How can states' rights be ignored? We can all take some optimism from the fight now being waged by the NADA members across the nation. They are angry, they are speaking up and they are pushing new legislation, House Bill 2743, that will reinstate the integrity of the state auto franchise laws.
It's the auto dealers this time, it might be your industry next. This craziness must be stopped! It's time to stand up, get involved and fight for our constitutional rights. There will be a Tea Party Two gathering for all concerned citizens, this evening, June 12 from 5:30 - 8 p.m. at Q'Emlin Park in Post Falls. Hope to see you there.
