Government report: race and gender a factor in killing GM dealerships

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Were race and gender some of the reasons why certain GM dealerships were closed down and others not? (h/t American Thinker)

According to a newly released government report from the Office of Special Inspector General For the Trouble Asset Relief Program it appears it may have been used as a criteria: (emphasis is mine)

GM determined that dealerships with a DPS Score of 100 were average performers; those below 70 were considered poor performers and would not be retained. SIGTARP noted, however, that GM did not uniformly apply the phase one criteria to the entire network. For example, our analysis found that two of the wind-down dealers did not meet either criterion. Furthermore, we found that, of the dealerships that met only one of the two criteria:

GM retained 355 (or approximately 41 percent) of the 858 dealerships that had a DPS score below 70.16

GM retained 9 of the 394 dealerships that sold fewer than 50 new vehicles in 2008.17

An additional 10 dealerships with a DPS score below 70 were in phase two wind-downs.

 GM officials attributed these inconsistencies primarily to a desire to maintain coverage in certain rural areas where they have a competitive advantage over import auto companies that are not typically located in rural areas, although ultimately close to half of all of the GM dealerships identified for termination were in rural areas. Other dealerships were retained because they were recently appointed, were key wholesale parts dealers, or were minority- or woman-owned dealerships.

On June 1, 2009, GM filed for bankruptcy. As indicated earlier in this report, bankruptcy would permit GM to accelerate the process without the restriction of state franchise laws. Bankruptcy laws supersede various state franchise laws, which could have required litigation or arbitration. GM management had also determined that the company would need to wind down more dealerships than those designated in phase one to

get close enough to the “ideal network size” of 3,380 dealerships.

 

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About the Author
Kerry Picket

Kerry Picket

Kerry Picket, a former Opinion Blogger/Editor of The Watercooler, was associate producer for the Media Research Center, a content producer for Robin Quivers of "The Howard Stern Show" on Sirius satellite radio and a production assistant and copy writer at MTV.

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