Government behind the wheel: More a matter of politics than of economics

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The US President Barack Obama played a key role in the revival of the struggling automobile industry after coming into power. The president formed an automobile task force co-chaired by Treasury secretary Tim Geithner and National Economic Council director Larry Summers, and Chrysler and GM were instructed to submit restructuring plans to the group for approval. Various observers suggested that dealership profitability, customer-satisfaction surveys, whether the full line of Chrysler products was offered to shoppers, and dealership saturation in a particular area contributed to the decision to close a dealership. Heritage Foundation researchers argued that reducing intrabrand competition should be a significant factor in the decision-making process. The Treasury Department responded with a statement claiming that the government had played no role in selecting the dealerships whose franchise agreement would be terminated.

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Independent Review

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