President Barack Obama will unveil his plan to save General Motors and Chrysler this morning.
While bailed-out bank bunglers are allowed to stay, GM CEO Rick Wagoner is stepping down at the Obama’s behest. And for good reason: Wagoner is part of the problem, not the solution.
In an interview with CBS’ “Face the Nation,” Obama said:
There’s been some serious efforts to deal with a combination of long-standing problems in the auto industry. What we’re trying to let them know is that we want to have a successful auto industry, U.S. auto industry. We think we can have a successful U.S. auto industry. But it’s got to be one that’s realistically designed to weather this storm and to emerge at the other end much more lean, mean and competitive than it currently is.
And that’s gonna mean a set of sacrifices from all parties involved — management, labor, shareholders, creditors, suppliers, dealers. Everybody’s gonna have to come to the table and say it’s important for us to take serious restructuring steps now in order to preserve a brighter future down the road.
A lot of dealers and their employees have already sacrificed: In the past 14 months, approximately 1000 dealerships have closed and 50,000 employees are out of work; thousands more have been laid off.
According to the National Association of Minority Automobile Dealers (NAMAD), 200 minority-owned dealerships closed in 2008. Indeed, black auto dealers are particularly vulnerable.
Black Enterprise reports:
In many instances, minority-owned dealers are far more susceptible to lose money faster because the businesses are typically first-generation operations with smaller cash pools to ride out economic downturns.
While auto suppliers have been thrown a lifeline, auto dealers are on life support.
NAMAD Chairman Desmond Roberts recently co-signed a letter to the President asking for emergency floorplan financing. The dealers warned:
Unless this situation is corrected, efforts to stabilize the U.S. auto industry will fail, further complicating the revival of the broader economy.
Another week, another request for a bailout.
