Car dealers won a round yesterday when they got the House to vote up a spending bill that would force GM and Chrysler to restore franchise agreements that were terminated in bankruptcy proceedings. The dealer cause has gained broad sympathy across party lines and in the public at large.
But I say let ‘em close. These are the guys who have fleeced the public blind with a century of manipulative and offensive sales practices. I know how the game works, because I used to sell cars (for about three weeks, until the smell overcame me). To defend these clowns as victims is not only rank hypocrisy, it shows once again how local pressure, broadly applied, creates legislative sentiment that works against the greater good.
On the one hand, House members defend the legislation, which they conveniently tied to a big appropriations bill to get it approved. They claim closing dealers down will produce “economic dislocation,” contribute to unemployment, and violate state bankruptcy laws.
On the local side, they protest that the dealers are the good guys—pillars of their communities, Little League backers, all that—and that the car companies haven’t proven how closing dealers saves money. On the latter point, yes, the companies have not shown anything like a new merchandising model to replace the antiquated dealer system.
In the Senate and the White House, there isn’t all that much sympathy for the dealer cause, and this legislation may well die in coming weeks or in reconciliation. Do House members honestly think the public will fork over more money to keep the car shills alive?
Where do you stand on this issue: Close dealers down, or keep ‘em open?