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By: Mark Tapscott
Editorial Page Editor
05/27/09 3:37 PM EDT
Evidence appears to be mounting that the Obama administration has systematically targeted for closing Chrysler dealers who contributed to Repubicans. What started earlier this week as mainly a rumbling on the Right side of the Blogosphere has gathered some steam today with revelations that among the dealers being shut down are a GOP congressman and closing of competitors to a dealership chain partly owned by former Clinton White House chief of staff Mack McLarty.
The basic issue raised here is this: How do we account for the fact millions of dollars were contributed to GOP candidates by Chrysler who are being closed by the government, but only one has been found so far that is being closed that contributed to the Obama campaign in 2008?
Florida Rep. Vern Buchanan learned from a House colleague that his Venice, Florida, dealership is on the hit list. Buchanan also has a Nissan franchise paired with the Chrysler facility in Venice.
"It's an outrage. It's not about me. I'm going to be fine," said Buchanan, the dealership's majority owner. "You're talking over 100,000 jobs. We're supposed to be in the business of creating jobs, not killing jobs," Buchanan told News 10, a local Florida television station.
Buchanan, who succeeded former Rep. Katharine Harris in 2006, reportedly learned of his dealership's termination from Rep.Candace Miller, R-MI. Buchanan owns a total of 23 dealerships in Florida and North Carolina.
Also fueling the controversy is the fact the RLJ-McCarty-Landers chain of Arkansas and Missouri dealerships aren't being closed, but many of their local competitors are being eliminated. Go here for a detailed look at this situation. McClarty is the former Clinton senior aide. The "J" is Robert Johnson, founder of the Black Entertainment Television, a heavy Democratic contributor.
A lawyer representing a group of Chrysler dealers who are on the hit list deposed senior Chrysler executives and later told Reuters that he believes the closings have been forced on the company by the White House.
General Motors now is on the verge of bankruptcy after bondholders forced it Wednesday to withdraw a plan to swap bond debt for company stock. The government, which has already provided $19 billion in loans to GM, could take a 70 percent stake in the company.
Chrysler, which has received $5.8 billion in federal aid, disclosed in bankruptcy court this month its plan to close about a quarter of its 3,200 U.S. dealerships by June 9. Chrysler also plans to close eight manufacturing plants, part of its work to shed assets, debt and contracts and shift its good assets to Italian automaker Fiat.
The direction gone is a far afield from the rosy scenario imagined by the president when he introduced his task force in February. Now, with two of the Big Three automakers on the brink of oblivion, lawmakers -- including some who approved diverting funds from the Troubled Asset Relief Program for banks for use by GM and Chrysler -- are starting to raise doubts about the overseers of the restructuring.
"Who is this auto task force and who do they represent? They certainly don't represent workers in America. They don't represent investors, they don't represent dealerships they represent various Wall Street interests," said Rep. Dennis Kucinich, D-Ohio.
Originally posted by Tentickles
ATS Press Corps is currently interviewing and researching for an article on this as well.
We're doing our work
The task force, headed by investment banker Steven Rattner, is comprised of Cabinet members and Obama administration officials who have extensive backgrounds in finance. They include Transportation Secretary Ray LaHood, Commerce Secretary Gary Locke, Energy Secretary Steven Chu, Labor Secretary Hilda Solis, Office of Management and Budget Director Peter Orszag and Environmental Protection Agency Administrator Lisa Jackson.
Bruce Belzowski, a professor at the University of Michigan and an auto expert, said despite their formidable resumes, the task force members started off behind the curve.
"They didn't understand the complexities of designing, developing, manufacturing and selling vehicles," said Belzowski, who was among the automotive experts consulted by the Government Accountability Office for a study on the auto bailout in April.
Belzowksi said he believes the group's lack of automotive experience is not a disadvantage.
• Vernon G. Buchanan: $147,450 to GOP candidates and organizations
• Wallace D. Alley and Family: $4,500 to GOP.
• Robert Archer: $4,600 to GOP and conservative causes.
• Homer S. Higginbotham and Family: $2950 to GOP.
• James Auffenberg and Family: $28,000 to GOP; $6,000 to one Democrat candidate.
• Michael Maroone and Family: $60,000 to GOP; $8,500 to two Democrat candidates.
• Jerome Fader: $6,500 to Democrats; $2,500 to Independent Joe Lieberman.
• Stephen Fay and Family: $13,500 to GOP.
• William Numrich: $20,000 to GOP.
• Robert Carver: $10,000 to Democrats including $1,950 to Hillary Clinton, nothing to Barack Obama.
• Robert and Linda Rohrman: $24,000 to GOP.
• Frank Boucher, Jr. and Family: $18,000 to GOP, $1,000 to one Democrat candidate.
• Scott Bossier: $4,300 to GOP.
• Todd Reardon: $17,000 to GOP; $2,000 to one Democrat candidate.
• Russ Darrow and Family: $78,000 to GOP.
• Bradford Deery and Family: $24,700 to GOP.
• Charles Gabus and Family: $30,000 to GOP.
• Brian Smith: $15,500 to GOP.
• Michael Schlossman: $14,000 to GOP; $14,000 to three Democrats ($12,500 to Sen. Russ Feingold).
• Don Hill: $11,000 to GOP; $12,800 to conservative incumbent Rep. Heath Shuler.
• Don Miller: $2,000 to GOP; $1,000 to Feingold.
• Eddie Cordes: $2,150 to GOP.
• Robert Edwards: $1,100 to GOP.
• James Crowley: $19,100 to GOP.
• Stanley Graff: $2,200 to John Edwards (2008 Presidential Run); $500 to GOP.
• John Stewart: $10,500 to GOP.
• John Fitzgerald and Family: $4,600 to John McCain (2008); $2,000 to Hillary Clinton (2008); nothing to Barack Obama.
• William Churchill and Family: $3,500 to GOP.
• Thomas Ganley: $9.450 to GOP.
• Gary Miller: $20,000 to GOP.
• Kevin and Gene Beltz: $18,500 to GOP.
• Arthur Grayson: $14,000 to GOP.
• Eric Grubbs and Family: $26,000 to GOP.
• Michael Leep and Family: $19,500 to GOP; $4,800 to three Democrats including Sen. Evan Bayh.
• Harry Green, Jr.: $10,000 to GOP.
• Ronald Hoover: $5,250 to GOP.
• Ray Huffines and Family: $18,500 to GOP.
• John O. Stevenson: $1,500 to GOP.
• James Marsh: $8,200 to GOP.
• Max Pearson and Family: $112,000 to GOP.
I have thus far found only a single Obama donor (and a minor one at that: $200 from Jeffrey Hunter of Waco, Texas) on the closing list.
Purists - and virtually every academic economist one happens to encounter - wonder what happened to the once inviolate principle of rewarding risk-takers. Unsecured creditors will get less of a stake in the new GM than its employees, and you can forget about poor unadorned stockholders.
As in the deal with Chyrsler's bondholders, the administration muscled its way through the negotiations and used its considerable leverage to convince secured debtholders - the highest class of investors - to accept a fixed return that was significantly less than many of those investors had expected when they put money into the falling company. Who benefits? The question isn't very apt, because everyone is losing something. But, on balance, the unions are getting a better deal.
The unions, who support Democrats - and whose work rules arguably hastened the collapse of the American auto industry.
Asked whether the Chrysler and GM bailouts were sops to unions at the expense of secured creditors, administration officials answer the subject of the question. That may be the case, they respond, but the other choices were untenable. As to the charge that the Obama economic team is redefining capitalism, erasing incentives for investors and acting like a gangster, I would wage an hour's worth of UAW productivity that officials, in private moments, would concede that these things are so. But they'd argue that, where critics see a contempt for capitalism, what's actually taking place is a revision of the informal rules that governed capitalism into the ground. A cultural revolution, if you will.
I'm five pages into it and I have found only one dealer who has given in the 2008 pres. election and it was to Hillary and guess which state it was from? Arkansasas...
Among those updates is the one linking to a Reuters report quoting a lawyer representing dealers being closed came away from a deposition of a senior Chrysler executive with the distinct impression that the company is simply following orders coming from the White House.
“It became clear to us that Chrysler does not see the wisdom of terminating 25 percent of its dealers. It really wasn’t Chrysler’s decision. They are under enormous pressure from the president’s automotive task force,” said attorney Leonard Bellavia.
If you doubt the accuracy of Barone’s formulation, check out another recent Reuters report, this one on a recent study by the California-based bond strategist Christopher Garman. Garman compared “spreads, or bonds’ extra yields over U.S. Treasury yields, for companies with collective bargaining agreements with the high-yield bond market as a whole.”
And guess what? According to Reuters, Garman found that spreads for unionized companies were 11 percent higher in February than those without collective bargaining agreements, and the gap has remained, measuring at nine points this month.
In other words, companies that want to prosper in the anti-capitalist world Obama is creating in America will first have to make their peace with Big Labor before heading to Washington hat and checkbooks in hand to seek favor from the strong men in the White House and their enforcers in the Treasury Department and elsewhere in the executive branch.
Obama calls it “change we can believe in.” Vito Corleone called it “making them an offer they can’t refuse.”
Dealers on the closing list donated millions to Republicans, $200 for Obama
The initial pass at the list of shuttered dealers showed they had donated, in the aggregate, millions to Republican candidates and PACs and a total of $200 to Barack Obama.
In fact, I have thus far found only a single Obama donor ($200 from Jeffrey Hunter of Waco, Texas) on the closing list.
Another review of all 789 closing dealerships, by WND, found $450,000 donated to GOP presidential candidates; $7,970 to Sen. Hillary Clinton; $2,200 to John Edwards and $450 to Barack Obama.
Now, and this is important, Chrysler claimed that its formula for determining whether a dealership should close or not included "sales volume, customer service scores, local market share and average household income in the immediate area."
Dealer Jim Anderer told Fox News' Neil Cavuto he can't comprehend how his dealership can be among those killed: he stated that his sales volume ranking is in the top 2 percent of all dealers.
Furthermore, Anderer says explanations aren't forthcoming. "They won't tell us. They seem to be running for cover right now because they won't give us a solid explanation. They come up with all these reasons, but none of them seem to make sense... This is insanity. The government is stealing my business. And they're telling me there's nothing I can do about it... There was no process that you could put your finger on and say, 'Hey, we cut 25 percent of the lowest performing dealers.' They didn't do that. Nobody will give us a real clear explanation of the formula that they came up with."
The odds of a non-partisan process being employed can best be illustrated by RLJ.
“Chrysler is already looking to open new franchises after closing 789 dealerships.”
- From: Automotive News, via
Stiffing GM's Creditors Will Backfire
By INVESTOR'S BUSINESS DAILY | Posted Wednesday, May 27, 2009 4:20 PM PT
The Law: Sure as the sun rises, the U.S. government's manhandling of GM and Chrysler bondholders will ripple outward, striking not only companies and their creditors but the very basis for U.S. power and prosperity.
Word is spreading. "I think the punishment for mugging bondholders will be a reduced trust of foreigners in the U.S. legal system and an increase of the interest that foreigners will request for investing in U.S. instruments," said Ottavio Lavaggi, an Italian bondholder who sued deadbeat Argentina over its $100 billion sovereign bond default in 2001. "There is no free lunch, and robbing bondholders . . . will have consequences."
If so, this could be a turning point. In "A History of Credit and Power in the Western World," Scott B. MacDonald and Albert L. Gastmann warned of a direct correlation between credit and power. "The combination of new muscle in industrial manufacturing . . . and finance clearly elevated the military and economic power of the United States, pushing it to the apex of the global credit system," they wrote.
Is succoring the UAW worth throwing all that away?
Originally posted by Stormdancer777
reply to post by grey580
Could be, perhaps all car dealers are republicans.
Originally posted by grey580
I call shenanigans!
I seriously doubt this story in it's entirety. Sounds to me like hysterical right wing propoganda.