Why General Motors Is Like the Postal Service

No one should have been surprised that members of Congress are stymieing General Motors' cost-cutting efforts to close thousands of dealerships. All they had to do was watch how Congress has micro-managed the supposedly independent U.S. Postal Service.

The Government Accountability Office, an arm of Congress, has been saying for years that USPS has too many post offices and too many processing and distribution centers. (See, for example, "Why USPS Must Consolidate Its Mail Processing Network".)

But any time the money-losing Postal Service actually tries to consolidate facilities, the local Congressman stirs up a hornet's nest, demanding an investigation and trying various tactics to slow the process. When USPS revealed recently that it is studying possible closure of more than 3,000 post offices nationwide, Rep. Albio Sires of New Jersey launched a preemptive strike, introducing the Access to Postal Services Act to "give communities the ability to fight back against these closings."

Now General Motors, AKA Government Motors, is getting the Postal Service Treatment: A bill to "restore the economic rights" of GM dealers got 111 co-sponsors within a week of being introduced. Like Chrysler before it, GM leaders have been grilled at Congressional hearings regarding their plans to consolidate their dealership network.

President Obama has said the federal government will not manage GM despite its majority ownership stake. But he also vetoed the possibility of it moving its headquarters out of Detroit to save money. Influential Congressman Barney Frank got into the We're Not Managing GM Spirit when he called the company's CEO and persuaded him to delay the closing of a parts depot in Frank's district.

Postal officials learned long ago that you move jobs into, not out of, the districts or states of committee chairmen.It's a lesson they haven't completely un-learned now that Congress has allegedly made the Postal Service more independent. (See "USPS: Clean Up the Byrd Droppings!")

The typical member of Congress doesn't oppose the idea of postal consolidation or car-dealer consolidation in general -- as long as it's not in his district. Unfortunately, believe it or not, every USPS facility and every GM dealership in the U.S. is in some Congress member's district.

Don't be surprised to see a Congressional investigation, rally, or public hearing for every dealership GM tries to close. And don't be surprised to see those former watchdogs known as local newspaper reporters become lapdogs for the Chamber of Commerce, quoting all the people who oppose the closings but never bothering to explore why GM needs to get rid of underperforming dealerships.

Just one question: Now that Congress is treating GM like the Postal Service, does that mean the Postal Service can cancel its debt by filing for Chapter 11?