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.
Those decisions resulted in "potentially adding tens of thousands of workers to the already lengthy unemployment rolls - all based on a theory and without sufficient consideration of the decisions' broader economic impact," the report said.
NPRNo mention of how politics were involved in which dealerships were closed. I remember at the time that there were several cases of dealerships getting the axe that were some of the more profitable in their areas, while smaller ones were left untouched. In a few of those cases, the owners were known republican donors.
