Is the Obama administration punishing Chrysler dealers for their politics?

The empire strikes back

Posted by Josh Painter
http://www.redstate.c...

Tuesday, May 26th at 10:51AM EDT

Is the Obama administration punishing Chrysler dealers for their politics? A preliminary analysis by Doug Ross suggests that could be the case.

There were too many things about the selection of dealerships to be closed that just didn’t add up. Some of the dealers chosen to be terminated were among the more successful outlets in the Chrysler dealership network, and many of them had been loyal Chrysler and Dodge agents who had maintained an excellent working relationship with the Detroit automaker for decades.

Some dealers who got a thumbs down from Obama’s automotive panel told compelling stories about their situations that raised doubts about the process of selecting them for closing. One example, a dealership in Alvin, Texas*, had increased its new car sales by 50% in the first four months of 2009, while other MOPAR dealers’ sales were in the tank. Another in Melbourne, Florida**, had, at Chrysler’s insistence, totally renovated its facility financed by incurring millions of dollars of debt in the form of a bank mortgage. The are just two of many stories which highlight the incongruities to be found on the list of dealerships not deemed worthy to remain in operation.
* Recently, Chrysler, LLC notified Rogers Dodge, Inc., in Alvin, Texas of their anticipated closing of our dealership."We qualified as a Five Star dealer for the 2009 calendar year. We have remained profitable through all of this downturn. We have in excess of $1,000,000 in working capital in our dealership. We are selling at or above market share. We pay $75,000 per year in local property taxes and collect millions of dollars annually in state sales taxes. We employ 38 Alvin, Texas residents who all pay property tax, sales tax and income tax. Chrysler is taking our franchise so that it can be given to our neighbor across the street, Ron Carter Autoland. Ron Carter Autoland has the local Ford, Chevrolet, Chrysler, Jeep, Pontiac, Buick and GMC franchises. They occupy a 40 to 50 year old building that does not comply with any manufacturer's design standards. They have recently moved their Ford, Chrysler and Jeep franchises into the same building, a violation of their franchise agreements with both Ford and Chrysler. They have recently cut their service hours, consolidated their used vehicle operations and laid off many employees. The manager, and a major shareholder, of Ron Carter Autoland is Mr. Cary Wilson, President-elect of the Houston Auto Dealers Association - apparently Mr. Wilson's political affiliation is very important to Chrysler."
** George C. Joseph, the sole owner of Sunshine Dodge-Isuzu, a family owned and operated business in Melbourne, Florida. His family bought and paid for this automobile franchise 35 years ago in 1974. George is the second generation to manage this business. On Thursday, May 14, 2009 George was notified, "that my Dodge franchise, that we purchased, will be taken away from my family on June 9, 2009 without compensation and given to another dealer at no cost to them. My new vehicle inventory consists of 125 vehicles with a financed balance of 3 million dollars. This inventory becomes impossible to sell with no factory incentives beyond June 9, 2009. Without the Dodge franchise we can no longer sell a new Dodge as "new," nor will we be able to do any warranty service work. Additionally, my Dodge parts inventory, (approximately $300,000.) is virtually worthless without the ability to perform warranty service. There is no offer from Chrysler to buy back the vehicles or parts inventory."

Such reports led Ross to investigate whether there were any political motivations behind the closings. He started with the list of Chrysler and Dodge dealerships which will be closed as a result of the government-mandated Chrysler bankruptcy plan. Then he marked those dealers whose names appeared more than once in the list. Next, he checked which ones contributed to political campaigns. Every one of them had donated almost exclusively to Republican candidates. Ross found only one dealer on the closing list who had contributed to the Obama campaign, a $200 donor in Waco, Texas.

Eric Dondero recognizes some of the dealers’ names on the hit list:

“Vern Buchanan is a Republican Congressman from the Tampa Bay area. Robert Archer is the son of former Republican Congressman Bill Archer. John Culberson, a libertarian-leaning Conservative, is now the Congressman for that West Houston District. He was heavily supported in his election efforts by the Archers Family.”

“Additionally, James Crowley, owner of a Chrysler Dealership in Escondido, California is on the list to be closed. Crowley is a big backer of libertarian-leaning Republican Cong. John Campbell of Orange County.”

The list is heavy with influential Republicans and libertarians. Another name on the list is Ray Huffines, who owns a large dealerhsip in the Metro-Dallas/Ft. Worth area. The Huffines family have been major contributors to Rep. Ron Paul (R-TX) over the years.

Chrysler maintains that “sales volume, customer service scores, local market share and average household income in the immediate area” were among the factors the company considered to determine which dealerships should be closed. However:

“In fact, there may have been other criteria involved: politics may have played a part. If this data can be validated, it would appear to be further proof that the Obama administration is willing to step over any line to advance its agenda.”