Despite the job loss resulting from the forced shutdown of General Motors and Chrysler dealerships, the auto industry bailout is still a focus of the president’s self-congratulatory stump speeches:
Now, the worse thing about it is that if we had done nothing, not only were your jobs gone, but supplier jobs were gone and dealership jobs were gone, and the communities that depend on them would have been wiped out.
While it is true that automakers have been temporarily rescued by TARP funds, 2,243 auto dealerships were sacrificed to the process.* A July 2010 TARP Special Inspector General’s report detailed the decisions and missteps made by the individuals behind the dealer terminations.
GM took responsibility for the unplanned acceleration of its dealership closures , but the decision to speed up the process had already been made by Obama’s “Auto Team,” a group with no auto industry experience :
The Auto Team was so convinced of the need for the acceleration of dealership closings that it highlighted GM’s proposed pace of dealership closings (approximately 300 a year over five years) as one of the primary obstacles to its continued viability, and required GM to revise its proposal to address the Auto Team’s concerns as a condition for receiving the additional TARP support that GM believe it needed to survive. Not surprisingly, GM’s and Chrysler’s plans for accelerated termination soon followed. 
The job losses resulting from the rapid closure of these small businesses were not even considered by the Auto Team until after the fact:
The impact of job losses was not a significant factor in the Auto Team’s findings that GM’s proposed pace would be an obstacle to its viability. Indeed, it was only after the decision was made that the Auto Team considered the impact its decision would have on job losses. 
An April 20, 2009 Auto Team memo projected that the combined closings would result in a short-term job loss of 115,701 jobs, and a long-term loss of 69,177 jobs.  Chrysler’s termination schedule alone meant an instant shutdown of 789 small businesses employing 40,000 people. 
Adding to the pain of the job losses was the question of whether they were even necessary:
… it is not at all clear that the greatly accelerated pace of the dealership closings during one of the most severe economic downturns in our Nation’s history was either necessary for the sake of the companies’ economic survival or prudent for the sake of the Nation’s economic recovery. 
Cost savings were not considered in the termination decisions, either. Savings estimates were provided after the closure decisions had been made , in response to pressure from members of Congress:
Indeed, key members of the Auto Team – including Messrs. Rattner and Bloom – stated that they did not consider cost savings to be a factor in determining the need for dealership closures. Nevertheless, GM officials stated that they developed the cost-savings estimate shown in Table 6 after being “pressed” during meetings with congressional representatives to explain the cost savings that would result from the dealership terminations. 
The president is taking credit for 55,000 jobs created by the auto industry since June 2010:
America’s automakers have added 55,000 jobs since last June. (Applause.) That’s the best job growth in more than 10 years in this industry. 
No mention is made of the job losses caused by the actions of his Auto Team, which hastened the sacrifice of the same small businesses Mr. Obama takes credit for supporting, with no clear indication that those sacrifices were necessary or even beneficial. This is the reality of the small business environment in Obama’s America, described in a rejected appeal from one of the terminated dealerships:
How can General Motors encourage and approve a dealer to make an investment in a franchised dealership and then in just 15 months after all of our investment tell us that there is no longer a market for the amount of dealers in this market. … Furthermore the commitment to our facility which was a 15-year lease with an option to purchase the facility at the end of 5 years is also a major factor that all parties were aware of at the time of this transaction. … My exposure on this facility is in excess of 4.5M over the next three and a half years. 
*Chrysler terminated 789 dealerships in 2009. GM announced it would “wind down” 1,454 dealers by October 2010.
1...President Barack Obama, Remarks by the President on the American Auto Industry and American Economy at Chrysler Auto Plant. Chrysler Jefferson North Assembly Plant, Detroit, Michigan, July 30, 2010.
2...Office of the Special Inspector General for the Troubled Asset Relief Program. Factors Affecting the Decisions of General Motors and Chrysler to Reduce Their Dealership Networks. July 19, 2010. p. 14.
3...Ibid. p. 2.
4...Ibid. p. 28.
5...Ibid. p. 13.
6...Office of the Special Inspector General for the Troubled Asset Relief Program. op. cit. p. 14.
7...Congressional Oversight Panel. September Oversight Report. The Use of TARP Funds in the Support and Reorganization of the Domestic Automotive Industry. September 9, 2009. Citing National Automobile Dealers Association, NADA Statement on Chrysler’s Dealership Reduction Announcement (May 14, 2009).
8...Office of the Special Inspector General for the Troubled Asset Relief Program. op. cit. p. 29.
9...Ibid. p. 30
10. Ibid. p. 25.
11..Remarks by the President on the American Auto Industry and the American Economy. Fort Motor Company Assembly Plant. Chicago, Illinois August 5, 2010.
12..Office of the Special Inspector General for the Troubled Asset Relief Program. op. cit. p. 21.