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One of the key things in this article seems to be that government programs pushed to give auto dealerships to minority owners during the 1970's and 1980's. Yes a noble cause...... now the worry seems to be that those minority dealerships, ones that appear to be less profitable than their non-government subsidized competitors, may get disproportionately hit by the government subsidized Chrysler's closing of government subsidized dealerships.
Minority Dealers Hit Hard By Auto Crisis - The Government Has Screwed another industry
Seeded on Fri May 15, 2009 4:29 PM EDT
Article Source: Wall Street Journal- Enjoy this article? Help vote it up the 'Vine.
- Public Discussion (1)
Where have we seen this before? Perhaps we only need to look at the housing market where government subsidized loans gave low income, minority and otherwise non-credit worthy individuals aid to buy homes.....forcing banks to make loans on criteria other than what business would prudently dictate. That program seems to have put the taxpayer at risk. These poor folks seem to be guilty of have drive and entrepreneurial spirit.
As the article points out, most of the minority owned, government subsidized dealerships were undercapitalized and were not able to buy the land their dealerships sit on...... this has caused lower profitablility over the past 30 odd years.......
I guess we will get to see if the Obama administration is more loyal to Affirmative action programs (closing more profitable locations in favor of minority owned, but less profitable dealerships), or is loyal to his UAW supporters that need to make their Union owned company more profitable...... interesting situation!!!!
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