Race Played Role in Obama Car Dealer Closures

The Obama administration, already under fire for unprecedented allegations of racial bias, faces a new bias claim from a most unlikely source: one of the administration’s own inspectors general.

Decisions on which car dealerships to close as part of the auto industry bailout–closures the Obama administration forced on General Motors and Chrysler–were based in part on race and gender, according to a report by Troubled Asset Relief Program Special Inspector General Neal M. Barofsky. “[D]ealerships were retained because they were recently appointed, were key wholesale parts dealers, or were minority- or woman-owned dealerships.” [Emphasis added.]

Thus, to meet numbers forced on them by the Obama administration, General Motors and Chrysler were forced to shutter other, potentially more viable, dealerships. The livelihood of potentially tens of thousands of families was thus eliminated simply because their dealerships were not minority- or woman-owned.

As has been widely reported, the Inspector General’s study skewered the Obama Gang for strong-arming the companies into closing 2,000 dealerships, costing an estimated 100,000 people their jobs during a recession.

But the news media has ignored key elements of Barofsky’s report–elements that are far more damaging, if possible, to Obama. As we reported earlier in the week, a top Obama official, manufacturing czar and “Auto Team” leader Ron Bloom admitted that the dealerships could have been kept open, saving those jobs, “but that doing so would have been inconsistent with the President’s mandate for ‘shared sacrifice.'”

Barofsky says the administration insisted on the closings even though a GM official told him “that GM would usually save ‘not one damn cent’ by closing any particular dealership. . . . Furthermore, a GM official stated that removing a dealership from the network does not save money for GM–it might even cost GM money–and that savings cannot be attributed or assigned to any one dealership.”

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Nevertheless, as Barofsky notes, “ultimately close to half of all of the GM dealerships identified for termination were in rural areas.”

That is where raw, hard, sewage-filled Chicago politics came into play.

Records indicate that in 2008, Obama lost the vote totals in the nation’s 1,300 rural counties by nearly 80%.

The Obama administration’s insistence on radical numbers of closures ended up shuttering dealerships in those rural areas disproportionately, while dealerships and jobs in metro areas–Obama’s geographical base–were left open.

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{snip} As Barofsky points out, the Obama administration was given an advance copy, and “Treasury [the Obama Treasury Department] might not agree with how the audit’s conclusions portray the Auto Team’s decision making or with the lessons that SIGTARP has drawn from those facts, but it should be made clear that Treasury has not challenged the essential underlying facts upon which those conclusions are based.”

Included among those undisputed facts:

* “[D]ealerships were retained because they were . . . minority- or woman-owned dealerships”;

* Thousands of jobs were lost, unnecessarily, due specifically to Obama’s “mandate for shared sacrifice”;

* A disproportionate number of Obama-forced closings were of rural dealerships, in areas unfriendly to Obama, even though such closures could “jeopardize the return to profitability” for GM and Chrysler.

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[“Factors Affecting the Decisions of General Motors and Chrysler to Reduce Their Dealership Networks,” from the Office of the Special Inspector General for the Troubled Asset Relief Program can be downloaded as a PDF file here.]