According to a Sunday-submitted report by Neil M. Barofsky, the special inspector general for Treasury Department’s Troubled Asset Relief Program (TARP), President Obama’s auto task force apparently pushed General Motors and Chrysler to close a number of their dealerships without either giving adequate forethought to the resultant job losses or having a firm idea of the cost savings that the move would bring along.

With reference to the tens and thousands of layoffs that the closing of dealerships brought about, the report said that despite the fact that both GM and Chrysler needed to shutter some of their underperforming dealerships, the cuts should not have been made so quickly, especially during the economic downturn.

Noting that the Treasury helped the two automakers out of a bankruptcy via a $80 million funding to both of them via TARP, Barofsky said in the report: “Treasury made a series of decisions that may have substantially contributed to the accelerated shuttering of thousands of small businesses ... potentially adding tens of thousands of workers to the already lengthy unemployment rolls.”

The report highlights the fact the both GNM and Chrysler stepped up their respective process of shutting down dealerships, largely because bankruptcy laws enabled them to cancel dealer contracts – while Chrysler cancelled
789 dealerships last summer; GM announced plans to wind down 1,454 dealerships by October this year.