Los Angeles Times
July 19, 2010
The Treasury Department’s push to have General Motors Corp. and Chrysler Group quickly shrink their dealership networks failed to properly consider economic issues such as lost jobs and lost auto sales and was based on false assumptions of cost savings, according to a report by a federal watchdog released Sunday.
“Treasury made a series of decisions that may have substantially contributed to the accelerated shuttering of thousands of small businesses … potentially adding tens of thousands of workers to the already lengthy unemployment rolls â€” all based on a theory and without sufficient consideration of the decisions’ broader economic impact,” said the audit by the special inspector general for the Troubled Asset Relief Program.
It said the Treasury Department “should have taken special care” to make sure the bail-out deals it crafted with the companies did not lead to more job losses during the “worst economic downturn in generations.”
GM and Chrysler underwent bankruptcy reorganization last year and emerged with funding from the $700-billion bailout program, known as TARP.
This article was posted: Monday, July 19, 2010 at 2:31 pm