Which Presidential Candidate is Right for Automotive Dealerships
The social media sites were hot last night during the presidential debate between Former Massachusetts Governor Mitt Romney and current President Barrack Obama. Since the election of former President Bill Clinton, our nation has been evenly divided over which man is the best person for the job of leading our nation amongst the world.
As a small business owner who helps companies, specifically automotive dealerships, build their business and "Win Customers for Life"; I have some very strong opinions about who I feel should become the next elected President of the United States of America. However, I will let the reader research and decide who I am for, and who I am against. (James Schaefer) This blog is meant to encourage voter participation and look at one philosophical point of view of each candidate and who is the best person for business.
I will try to take a simple common sense approach and put forth the facts as if I were hiring for an executive position within my own company. This essentially is what Americans will be doing in November when they go to the polls. However, just like in the real world; some people would not make good business owners or managers, and some people need to reevaluate whether they are making the right decisions when they vote. Now remember, I am writing this blog about one of the many issues that is very important to me and my company. I am not writing this issue concerning healthcare, defense, or government sponsored programs. Therefore, a truly informed voter should look at all of the issues individually and way them to how their interest would be affected by the outcome of this year's election.
The following point and position is described referencing Small Business and each candidate's position. Hopefully, by laying this out in this format the reader will be able to ask questions of their own and vote for the best candidate that will help them and their interest. This is why the United States is so great. We all have a voice in who will govern us for the next four years.
Small Business:
The fundamental question is what is a small business? My definition is a business that was started from an individual or a group of individuals that developed their company because there was a need for their services or products. It is a business that is not financed by government or publically traded on the stock market. A small business is a private company, and how much money the company makes is NOT a factor. The reason that I feel the amount of revenue a company makes should not be a factor whether the business is considered a Small Business or not is because the risk completely falls on the individual or group of individuals who have created the company. They could fail if the business fails, but if it succeed they should benefit as well. In addition, I believe that the higher the revenue the company receives, the more opportunities they are able to provide for future employees and other companies that provides goods or services to that company.
Now the government has a different definition of Small Business. The Small Business Association (SBA) defines a small business as one that is independently owned and operated. It is organized for profit, and is not dominant in its field. Depending on the industry size standard eligibility is based on the average number of employees for the preceding twelve months or on sales volume averaged over a three-year period.
Most Automotive Dealerships should fall under this definition of a Small Business. However, until recently most dealerships were not classified as a small business. The Recovery Act of 2009 reclassified 89% of automotive dealerships under the SBA; however, the gross revenue receipts were put at $8.5 million. My contention is that this is not fair to the Automotive Industry. There should not be a cap placed on any private business in terms of revenue received nor should a cap be placed on these automotive dealerships for profits gained.
The simple reasoning is that if an automotive dealership is successful; they employ sales people, service technicians, administrative personnel, accountants, parts specialist, and vendors (like my company). Their staff brings in more income which they will spend stimulating the economy. The vendors they employ are able to hire more employees and the cycle of economic growth will continue in a positive direction.
The candidates' positions:
President Obama believes that a Small Business is classified by how much revenue a company brings in. He believes that a company making $250,000 or more should be taxed at a higher rate according to CNNMoney.com. Under this premise, the government would be able to collect more taxes and thus be able to provide more programs for Americans.
Governor Romney believes that taxes are necessary, but tax breaks for Small Businesses would create more jobs. He has stated that the 3% of the highest grossing revenue companies are responsible for 80% of the jobs that Small Businesses provide. In short his method for creating more jobs is to give a break to these businesses and hope those companies will hire more people to help the business continue to experience growth.
I understand each candidates philosophical position on the issue and respect their and others opinion. The president believes that a company which makes more money should pay more taxes to help the country and its government backed programs. The governor believes that leaders of successful business will practice good ethics, and thus provide a piece of the pie for more individuals.
A new study by Ernst and Young projects that a tax rate hike will kill 710,000 small business jobs. Depending on who is elected will determine if this result comes to fruition.
I can tell you this. The larger my company becomes, the more people we will be able to hire. The more profit my company earns, the more benefits we will be able to provide individuals. The more benefits we are able to provide to employees, the better our retention of employees become. If we are taxed at a higher rate, our company will not be able to provide as many jobs otherwise. It is true, I will put more dollars into my account if my company continues to be successful. Contrary to the president's speach about small business "you didn't build that business" in July, I used my own money to start this company. My family and our employees depend on the success or failures of this company. I am sure many automotive dealerships will face the same concerns.
Hope to see you at the polls in November.
Comment
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Comment by David Ruggles on October 5, 2012 at 1:39am
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RE: "Democrats avoid math."
When was the last time we had close to a balanced budget? What party was that? Obama's deficit comment came long before the economy cratered. It turns out that Romney wouldn't cut spending in the face of recession either. Have you missed that one? Its just basic economics. Harry Reid has been giving the Republicans a taste of their own medicine. If the Republicans would pass any of a number of Obama proposals, it would positively impact unemployment. Start with the Infrastructure Bank and the Open Fuel Standards Act. The Republicans have been more involved with obstruction to the detriment of the country. Their stated goal is to deny the President another term. That's all you need to know about them.
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Comment by Doug Davis on October 5, 2012 at 1:18am
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For my part, I like a President with rudimentary math skills. I'm still trying to get around Romney's $5 trillion tax cut, $2 trillion increase in military spending, which the military hasn't even requested, and his claim that he can still cut deficits. The CBO has already predicted the creation of 12 million jobs in the next 4 years. Romney is already taking credit for it.
Didn't Obama promise to cut the deficit in half? Democrats avoid math. They haven't passed a budget in nearly 4 years. The budgets that were passed by the House, Harry Reid wouldn't allow to go to the floor of the Senate. Obama proposed a budget but not a single Democrat would vote for it. The Ernst & Young's recent study found unemployment would increase by .5 percent if the president’s small business tax hike is imposed.
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Comment by David Ruggles on October 5, 2012 at 12:46am
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RE: "Owners of current GM (GM, Fortune 500) shares, which closed at just 75 cents a share on Friday, will have their investments essentially wiped out."
This is an example of a writer who misstates the situation. We've all done it. Did the bankruptcy wipe out stockholders or did the market wipe out the stockholders? I bought shares in GM at $20. When they cut their dividend years back, I sold all but a single share. So my single share dropped from $20. to seventy five cents. The market did that, not Obama, the government, the BK judge. Same with bond holders. The statement by the author seems to say that the BK wiped out the shareholders. WRONG.
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Comment by David Ruggles on October 5, 2012 at 12:38am
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Doug,
What you describe is an attribute of a Section 363 BK, which is what these were. I don't need to reacquaint myself with what happened. It was my job to follow it minute by minute to write and report on the process. While I am certainly not the only person tasked with covering the rescue of the North American industrial base, I have been privileged to have access others haven't had. I don't need to read what others have written to know what happened. If you want a blow by blow visit the autosandeconomics blogspot.
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David, I am not suggesting that anyone did anything wrong. It was a pre-packaged agreement and GM was in and out of Chapter 11 in just over a month. Here are two articles that give the time table:
http://money.cnn.com/2009/06/01/news/companies/gm_bankruptcy/
http://www.washingtonpost.com/wp-dyn/content/article/2009/07/10/AR2...
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Comment by David Ruggles on October 4, 2012 at 11:18pm
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RE: "Normally, the bankruptcy judge acts like an arbitrator and decides what concessions all parties will make. This agreement was rubber stamped."
Do you have some inside information? The two BK judges, Gerber and Gonzales, were selected by lottery. The Chrysler BK was litigated to the Supreme Court. Who are you saying rubber stamped the BKs, and what is your source? Or are you merely speculating because you don't really know what happened. Google up the judges and tell me about "rubber stamp." These are two of the preeminent BK judges in the country.
http://www.detroitnews.com/article/20090502/AUTO01/905020338
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Comment by Mark Dubis on October 4, 2012 at 10:56pm
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When I go into the polling booth in November I’m going to vote for the candidate:
- who knows the value of hard work, can hold up under the pressures and stress of the business world, and has shown by their past actions they helped to create something of value to benefit others
- who has shown personal commitment to God, faith and family
- who will fight to protect our way of life when forces in the world want to destroy everything we love and cherish
- who knows that all of us deserve a fair shot at being successful even though the playing field isn’t always even
- who stands ready to pitch in and help our neighbors when they really need it
- who will not discriminate against people based on the size of their wallets
- who realizes that big government and laws aren’t always the answer to every problem , but are often the cause of the problem
- who works hard every day to bring the country together, and doesn’t blame somebody else for your problems
- Who when they go to bed every night will question whether they did enough that day to improve out lot in life, protect us, and help better educate future generations
And then I will say my prayers and thank God, we don't have to endure any more political attack ads.
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Fred, Bush isn't running and he spent money like a liberal.
I don't think Romney would be apposed to giving GM the money if they would have actually gone through a debt reorganization plan.
Obama's only concern is getting elected for a second term. He is an anti-business, socialist that believes government is the answer. He is the ultimate tax and waste liberal. This country is already broke. Four more years will put us on par with Portugal, Spain and Greece. $16 trillion in debt and the sky is the limit.
We have had 42 months of unemployment above 8%. The jobless rate is far worse than the statistics show because many people have given up on looking for work. More people are on food stamps and disability than any time in our history. The GNP just hit a dismal 1.3%. We are facing the biggest tax increase in American history. If that happens you will see the largest decline in the stock market since 2008.
We have four years of experience with Obama, we know him. He has no plan. Yes, with Obama, things will only get worse.
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Comment by Fred G. Slabine on October 4, 2012 at 10:01pm
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Mr. Davis where did the money come from for GM to live? There wasn't anyone on this planet that had the money to save GM and Chrysler. Who took a gamble and it is paying off? President Obama, that's who, yes, he cares about all of the people in the US not just the top 1%.
Tim, as a matter of FACT Government is down over 167,000 jobs since Mr. Obama came into office, Mr. Bush exploded the government payrolls, went to war in without paying for it and gave huge tax breaks to the rich that all of the United States will have to pay for years to come. Willard has Mr. Bush's people advising him, he wants to add 100,000 soldiers to the military, add more expensive weaponry and make the Bush tax cuts extended forever. Where is that money coming from?
Look at Willard’s Ma record #47 in job creation in the US, how much worse, can it get than that? Why do the people in Mass intensely dislike Willard? Simple answer They know him.
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David,
GM DID file for Chapter 11 bankruptcy. They DID get rid of massive union legacy costs and onerous work rules. And they ARE back in business in better shape than before
GM did file a Chapter 11 but it wasn't a typical filing. It was a pre-packaged agreement. At the time, they had $82 Billion in assets and $173 Billion in liabilities. Normally, the bankruptcy judge acts like an arbitrator and decides what concessions all parties will make. This agreement was rubber stamped. GM is still saddled with the unfunded pensions. If you add those pensions and what they still owe the taxpayers, it is about equal to their diminished assets. This is not a pretty picture and why I say they will be coming back to the trough.
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