WASHINGTON — The Treasury Department failed to consider the economic fallout when it told General Motors and Chrysler to quickly shutter many dealerships as part of government-led bankruptcies, a federal watchdog found.
A report released Sunday by the special inspector general for the government’s bailout program raised questions about whether the Obama administration’s auto task force considered the jobs lost from closings.
The Treasury didn’t show why the cuts were “either necessary for the sake of the companies’ economic survival or prudent for the sake of the nation’s economic recovery,” said the audit by Neil Barofsky, the special inspector general for the Troubled Asset Relief Program, the $787 billion stimulus program.
The Treasury’s decisions resulted in “potentially adding tens of thousands of workers to the already lengthy unemployment rolls — all based on a theory and without sufficient consideration of the decisions’ broader economic impact,” the report said.
Treasury officials said they strongly disagreed with many of the findings and said the companies have rebounded because of the government’s efforts.
