The Unintended Consequences continue. My contention all along has been that a GM bankruptcy would put over one thousand GM dealers, and hundreds at Chrysler, out of business. This would spread the distress all over America, not just in the midwest. Dealers forced to expand to new buildings in the last few years would default, and what to do with those floor planned cars on the lots? My point was that it would be cheaper to keep them alive than to suffer the defaults and unemployment claims all over the US.
Now my worst fears are happening. We are getting a government forced bankruptcy, dealers are being willy nilly put out of business, and both sides of the aisle are horrified. Translation, the e mail and phones at Republican and Democrat offices are ringing promising retaliation for failing to support local business.
As the article notes, more GM dealershps will be closed than Toyota has dealerships, do not kid yourself, that is not only a lot of jobs and local loan defaults, it will ripple through local economies. Just as car manufacturers have suppliers, local dealers depend on tire shops, paint shops, and all sorts of others to make things work. Pulling the plug in one month will be very very painful.
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