SIGTARP Targets GM for Dealerships Closure

2009 was the year of reinvention for two of the biggest automotive players in the US, GM and Chrysler. Their reinvention however did not come cheap, both in terms of actual money spent on their revival and in terms of people affected by the reorganization of the two giants.

Amidst billions pored into the two companies, the drama of what has come to be known as rejected dealers was in the spotlight for months. Now, that drama is being revived by a report of the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP).

According to SIGTARP, the two manufacturers begun the whole reorganization process with determination, but lost that along the way. GM for instance was inconsistent in deciding which dealerships to close, while Chrysler adopted a subjective restructuring plan. The report also blames the Auto Task Force for speeding up the termination process, when it's not clear whether that was necessary.

"Treasury should have taken every reasonable step to ensure that accelerating the dealership terminations was truly necessary for the long-term viability of the companies," the report reads.

As usual, GM was quick to respond to the report, releasing a statement on Sunday in which it says it did its best.

'GM cooperated fully with the SIGTARP to best document the company's efforts, as well as the criteria and numerous business factors used in GM's dealer wind-down and appeals process.  The GM which existed at that time did its best to develop and implement an objective dealer consolidation process under extraordinary circumstances,” the carmaker says.