Constitutionality on auto pilot

Rep. John Campbell (R-Calif.) knows a thing or two about the auto business. He worked in the industry for 25 years, which, according to him, is “more time than everybody on the Obama auto task force has spent in the car business by 25 years, since not a single one of them has spent a day in the car business in any way, shape or form.”

The Obama administration’s auto task force, which is headed by former New York Times journalist Steve Rattner, has been criticized for its lack of experienced members. On May 29th, Rep. Steven LaTourette (R-Ohio) told CNSNews.com that the task force is “unelected and inexperienced,” and 36 congressmen from both the Republican and Democratic parties have sent a letter to Obama asking him to return the authority over the auto bailout back to Congress.

At a Heritage Foundation’s bloggers’ briefing on June 16th, Rep. Campbell voiced his concerns about many of the policies implemented during the Obama administration’s bailout of General Motors (GM) and Chrysler. “What the Obama administration task force has done on this is really scary, it’s scary on a number of levels,” he said.

One cause of his uneasiness was the recent government-mandated closure of thousands of GM and Chrysler dealerships, which Rep. Campbell said targeted dealers at random without regard for their profitability or their contractual terms.

Chrysler has announced that it will be closing at least 800 dealerships this summer and GM hopes to close approximately 2,5000 dealerships by the end of next year, reported the New York Times on June 3, 2009.

“Many of the dealers who were terminated were profitable…large volume profitable dealers right up to the day they were terminated,” said Rep. Campbell.

According to the Congressman, this process raises legal problems. “At some point the constitutionality of this whole thing needs to come into question because if you…abrogate that kind of contract, just eliminate contracts…then the basic rule of law in this country is in question,” he said.

In addition, Rep. Campbell argued that this type of government activity discourages entrepreneurship because “there’s a political risk to doing business in the United States.”

As of now, around 500 dealers have appealed their closure to GM and so far only 11 have won their appeals, reported Bernie Becker of the NY Times.

Alana Goodman is an intern at the American Journalism Center, a training program run by Accuracy in Media and Accuracy in Academia.