“I’m from the government and I am here to help you.”

“I’m from the government and I am here to help you.”

These are the words that can strike terror in the hearts of most Americans, especially those in business for themselves. The words, “I’m from the government and I am here to help you,” came to mind this week when I read a newspaper article, “Government watchdog criticizes handling of car dealers,” written by Ken Thomas, an Associated Press writer.

The article referred to the government bailout of General Motors and Chrysler and how the Treasury Department told both companies to quickly shut down many dealerships. This has made no sense to me whatsoever. I cannot think of any valid reason for the government to insist that GM and Chrysler cancel several thousand dealers who bought, sold and serviced the cars and trucks that they built.

The article reads, “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.”

For the life of me, I cannot understand how canceling a bunch of dealers reduces costs for the auto companies. But the Fed thought so. When I retired from my corporate job as head of sales for Johnson and Evinrude outboards, I bought a Chevy dealership. In no way can I believe that my dealership or any other auto dealer that I know of was an expense to General Motors. They made money on the new cars I bought from them, and believe me, they charged me for everything that they sent to me, whether I asked for it or not. Brochures, flyers, banners, posters, ad slicks, service tools, and more were automatically shipped and billed to me. I even had to pay for some special service tools my service department did not want that were for large trucks that my dealership did not stock, sell or service. But they shipped stuff like that to me and I had to pay for them. Nothing was ever free from “The General,” as their reps often called the company.

It also said in the article, “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 a special inspector general for the Troubled Asset Relief Program, the $787 billion stimulus program know as Tarp.”

So the brilliant minds at the Treasury, who know nothing about running a car company or any kind of a dealership, determined that GM and Chrysler could cut costs by canceling dealers who bought their products. That makes about as much sense as a dealer for boats or cars saying, “If I don’t sell a boat or car to John Doe I will be cutting costs.”

The article continued, “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 theory and without sufficient consideration of the decisions’ broader economic impact.”

Fortunately some of the cancelled dealers were able to get reinstated through an appeal process. But a lot of dealers did not get reinstated. And many of them are in rural areas and their former customers will now have to drive many miles to a dealer who was not cancelled to get service on their vehicles.

Now I was in favor of the government bailing out GM and Chrysler as I did not want to see two of the three American automobile manufacturers go belly up. But after the bailout, GM and Chrysler started getting more help than they needed from bureaucrats who know nothing about running a business. So if anyone ever comes to a dealership, distributorship, or industry manufacturer and says, “I’m from the government and I am here to help you,” my advice is …..run and hide…it will probably involve more help than you need!

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About Ben H. Sherwood

Ben H. Sherwood is a marine industry veteran and a marketing consultant who operates Sherwood Marine Marketing in Pleasant Prairie, Wis. For more info, click About on the main menu.

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