The Messy Business of Temporarily Taking Over the Auto Industry
When it took Chrysler and GM into receivership in orchestrated bankruptcy deals, asset sales, bailout provisions and Treasury loans, it took its share of political heat for doing so, and auto bailouts still come up (sometimes before TARP) when people complain about the Obama administration's response to the crash. This isn't likely to change critics' minds: an IG report finds that the closing of some dealerships was unnecessary. From the AP's Ken Thomas:
The Treasury Department failed to consider the economic fallout when it told General Motors and Chrysler to quickly shutter many dealerships as part of government-led bankruptcies, a federal watchdog found.A report released Sunday by the special inspector general for the government's bailout program raised questions about whether the Obama administration's auto task force considered the job losses from the closings while pressuring the companies to reduce costs.Treasury didn't show why the cuts were "either necessary for the sake of the companies' economic survival or prudent for the sake of the nation's economic recovery," said the audit by Neil Barofsky, the special inspector general for the Troubled Asset Relief Program, the $787 billion stimulus program known as TARP."Treasury made a series of decisions that may have substantially contributed to the accelerated shuttering of thousands of small businesses," investigators said.
Read the full story from the Associated Press.