In the wake of a drastic reductions in the sizes of the dealer networks of Chrysler and GM, the U.S. Treasury Department will be conducting audits that cording to the Treasury, “will examine the process used by General Motors and Chrysler to identify which automotive dealerships should be maintained or terminated.”, according to Automotive News.
Neil Barofsky, who was appointed by President Obama and confirmed by the Senate as special inspector general for TARP in 2008, told the Senate Banking Committee yesterday that his dealer audit “will examine the process used by General Motors and Chrysler to identify which automotive dealerships should be maintained or terminated.” Many dealers are claiming that the dealership closing process was an arbitrary one that resulted in the closing of many profitable businesses.
Chrysler trimmed their network by 789 dealerships and GM expects to complete its downsizing by October of this year, at which time they will have seen about 1,350 closures.
Barofsky also said that his team will be auditing “governance issues when the U.S. government has obtained a large ownership interest in a particular institution.”, as the U.S. government owns a 60%stake in GM, though he has not mentioned GM specifically.
– By: Stephen Calogera