Is there really a Dealergate?

by Eugene on May 29, 2009

in Economy

It’s now been dubbed “Dealergate” — Chrysler’s closing of dealerships seem to have a twist of political lime in it. Did Obama’s Auto Task Force target Republican donors in deciding these closings? Blogger Doug Ross has some statistical insight into the whole matter:

All other factors being equal, what are the odds that RLJ’s dealerships would remain open while all other area dealerships would be shuttered? The approximate odds of such an occurrence can be calculated. 789 of the Chrysler’s dealerships are closing, which represents 25% of the total (according to MSNBC).

Recall that Chrysler claimed that its formula for determining whether a dealership should close or not included “sales volume, customer service scores, local market share and average household income in the immediate area.”

Thus, the odds that any, randomly selected, single dealership would remain open is roughly 75%. The odds that a single dealership would close is roughly 25%.

In the Bentonville, AR territory, the odds that RLJ would remain while its competition gets axed is .75 * .25 * .25 = .046875 (4.6%).

In Huntsville, AL, the odds are .75 * .25 * .25 = .046875.

In Branson, MO, .75 * .25 *.25 *.25 = .01171875.

In Lee’s Summit, MO, .75 * .25 *.25 *.25 *.25 = .0029296875.

In Shreveport, LA, .75 * .25 *.75 = .140625.

What are the odds of all of these RLJ dealerships remaining open while their competitors are wiped out? Maybe 1/10,000,000 of 1%. Yes, that’s one ten-millionth of one percent.

Is there really an “enemies list” or are Chrysler dealership owners more Republican-leaning anyway as some liberal bloggers have argued?

Let’s just say this: for this administration, do not be surprised if such a list exists.

If President Obama and his administration can oust CEOs of major corporations, what’s to stop them from targeting specific groups like car dealership owners?

The investigative bloggers are to be applauded for their efforts in researching this possible abuse of government powers. Once again, the mainstread media has fallen behind in uncovering real news.

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