Dealer Plan Will Kill Jobs

President Obama's auto task force plans to put 150,000 Americans out of work and will gain nothing by doing so. The task force has proposed eliminating many auto dealerships, an act that will result in the loss of more than 150,000 jobs nationwide. These aren't just sales jobs: Virginia will lose service, clerical, and administrative jobs as well. And even more jobs will be lost in the many small businesses in local communities that support these dealerships.

There are no cost savings to be gained by the manufacturers in putting these dealerships out of business and ending the careers of thousands of Virginians. Dealerships do not cost manufacturers money. In fact, dealerships save them money.

Dealers are independent businesspeople in small towns and large cities across Virginia who provide jobs in our communities and absorb 100 percent of their own expenses. They pay for the buildings, equipment, signs, and all of the vehicles on their lots. They pay the salaries of all their employees. Dealers buy products and services from other local businesses -- and dealers contribute to local charities and civic causes.

Dealers are the manufacturers' customers. They are not an expense but are, in fact, the manufacturers' primary source of revenue. Artificially reducing the number of dealerships will reduce the number of customers for them and will reduce the number of sales outlets to local consumers.

Washington bureaucrats should not be deciding the fate of small businesses in Virginia communities. They do not understand the unique factors within our communities. For example, unless you live in Richmond, you wouldn't understand that the James River effectively cuts the city in half. Many consumers don't cross the river unless they absolutely have to do so.

In the long run it will be consumers who pay the price for these bureaucratic choices. Chopping away an enormous number of dealerships will significantly reduce competition, which will hurt buyers. It will create a huge inconvenience for many consumers who find themselves having to drive 30 minutes or an hour to another town or city for service. And it will hurt the manufacturers, as many of these consumers decide to buy only vehicles that are locally available so they can have their vehicle serviced conveniently.

The free market should be allowed to decide how many and which dealerships should survive, not the auto task force. The market does an excellent job of determining which dealerships are in a position to survive. If they cannot survive, the current economy will naturally purge those dealers at no cost to the manufacturers.

In the first 100 days, the administration has done a good job of championing the average American. It is my hope that the administration will continue to champion American workers and prevent the task force from eliminating dealerships and jobs.

Thousands of Virginians rely on the administration's support.

Donald L. Hall is president of the Virginia Automobile Dealers Association. Contact him at or (804) 359-3578.