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Federal Report Reveals Dealer Terminations Unjustified

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On: Tue, Oct 26, 2010 at 2:29PM | By: Sherry Christiansen

 Federal Report Reveals Dealer Terminations Unjustified

The chairman of the National Automobile Dealers Association (NADA) announced that the method of terminating dealerships that was handled by Chrysler, General Motors, and the Obama administration were “unjustified.”  The findings were the result of an audit report compiled by federal regulators.  

“The result of this report validates what NADA said all along—that these terminations were unjust, they were uncalled for,” NADA Chairman Ed Tonkin stated to the Associate Press yesterday. Dealers do not cost the manufacturers money, and the cuts were “done in haste and in error,” Tonkin said. “The auto task force got it wrong. The administration got it wrong.”

The audit, performed in July, prompted an investigation by the Office of the Special Inspector General for the Troubled Asset Relief Program. The investigation was ordered to find out whether illegal activity was a factor when dealerships were closed by Chrysler and General Motors.

In 2008 TARP received $700 billion in the infamous Bush administration bailout of banks and other companies, including General Motors and Chrysler. Since GM and Chrysler filed bankruptcy, approximately 1,550 GM dealerships were terminated and Chrysler closed 760 stores.

The date the investigation will be complete has not yet been determined and Tonkin stated that he is unaware of what is happening with the investigation right now. Tonkin did, however, state that the National Auto Dealers Association did meet with investigators to answer questions regarding the association’s meetings with the Obama automotive task force.

This week Steven LaTourette, Ohio congressman, contacted the administration to request that the dealership closings scheduled on October 31st could be postponed until the investigation is complete.

Tonkin was quoted as stating that he is hopeful that the investigation will end soon; he also stated: “As much as we can do to help those dealers, we're all for it.”


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