Rejected dealers become footnotes to history

Neil Roland is a Washington-based reporter for Automotive News.
Many rejected dealers have been buffeted over the last year by the whims of the powers that be.

The Obama administration pushed GM and Chrysler to use a meat cleaver rather than a surgical knife in making cuts, the inspector general for the Treasury Department's Troubled Asset Relief Program said earlier this week.

The Treasury Department's auto task force viewed the dealers as annoying obstacles to the companies' resurgence rather than potential partners.

The companies used questionable and inconsistent criteria in terminating dealerships, and the appeals process set up for them - when one was set up - was haphazard.

Dealers had to listen as auto executives mouthed cost-saving platitudes to Congress that bore little relationship to reality, the report said.

And businesses that had been built by generations of families were crushed by an alliance of government and corporate powers.

When Congress set up an arbitration process for rejected dealers in December, many thought they had been thrown a lifeline. They plunked down tens of thousands of dollars on the hope of reinstatement.

The process did in fact work for many dealers. But others got kicked in the teeth when arbitrators deferred to the companies' rationale for dealer cuts.

These rationales, like the criteria used to terminate dealers in the first place, were often based on the flimsiest of evidence, the audit said.

But the auditors were like well-intentioned yet bumbling cavalry that couldn't find their way. They arrived too late - days after the arbitration hearings were over. And the arbitration decisions are binding.

So many dealers have been left holding the bag -- with no apparent recourse -- as they become footnotes to history