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.

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Comment by lenny bello on October 4, 2012 at 5:40pm

who ever thinks that president obama didn't save the american car industry is living in a different galaxy. When all the banks froze he took a stand and saved our industry. Me as an life long car guy for the life of me can't understand why we car guys are so ungreatful towards him Mr romney clearly said let detroit go bankrupt if we would have gone his path there would not be no GM - FORD - CHRYSLER - how as americans are we not going to have our own american made or brand cars.

Comment by Brent Larsen on October 4, 2012 at 5:33pm

The amount of tax that a dealership pays affects profitability, cash flow, and growth.  The higher the tax, the less flexibility a dealership has to invest in growth opportunities and hire new employees.  As a business, you definitely want a President who will not burden you with heavy taxes.  That being the case, I believe the choice is quite obvious.

Comment by James Schaefer on October 4, 2012 at 5:16pm

Thanks Doug for reading & commenting on the blog!  You made some really good points.  I love the passion & knowledge of the subject you bring.

Comment by Doug Davis on October 4, 2012 at 5:12pm

@Joe, Obama could care less about GM.  He bailed out his union buddies.  If GM would have gone through Chapter 11, the unions would have had their wages and pension plans cut.  As it is, GM will be back to the government with their hands out and they still owe us billions.  He was protecting his base. Fiat now owns Chrysler.  

Bain Capital bought companies when they were about to close their doors.  They brought in new management and a great deal of capital.  He is rich because he was successful in turning them around.  I don't see anything "dirty" about that.  

Having the highest corporate tax rate, in the world, is responsible for a lot of jobs going to China.

Comment by James Schaefer on October 4, 2012 at 5:08pm

Thanks Mr. Natural, Bob, and Fred for reading my blog and commenting.  Although I did not actually share who I am voting for- I love the fact that people are so passionate about this topic.  I do agree with Mr. Natural on one thing, and that is we will survive because that it is the type of people we are.  Fred is correct that the current President helped the Domestic Automotive Industry; however, I also own a couple of other companies and the small business policies did not help those.  Anyway- not that my opinion matters...I'm just glad that everyone is talking about the blog on this site and others.  Just remember that whoever is elected- they work for us.

Comment by Fred G. Slabine on October 4, 2012 at 4:59pm

I agree with Mr. Sorenson. Let's realize that the plan Mr. Romney was talking about last night is totally different from one he has been pushing all along. There is a reason why republicans in Massachusetts are hiding the fact that they will not endorse him, or even mention the fact that they are republicans. No wonder the state under his governorship was number 47 in job creation. He sends the jobs to China!

Do you remember the republican debates, what happened to that guy? Etch a stetch? So, let's say he wins, who will be sworn in the hard leaning right winger or the Massachusetts moderate? He favored abortion and now doesn't. He raised fees tremendously in Mass; are fees not taxes?  Do not be fooled 'he will say anything to win".

President Clinton said it best "the math does not add up"

One last thought what would have happened to your lively hood if President Obama did not save the American Auto Industry? Let’s be honest with ourselves if the American auto industry went the way Willard (who is ashamed of his first name) it would take the foreign car business also, as they are all connected through suppliers, dealerships etc.

Comment by Bob Sherman on October 4, 2012 at 4:46pm

I would prefer to see Romney win.   I believe Romney will fix the Delphi pension mess Obama and Geithner both created.   The Delphi people were just screwed for political reasons.

Comment by Mr. Natural on October 4, 2012 at 4:40pm

I hope Romney wins just to show all the stupid fools what a self serving dirt bag he is. That guy will say anything to get in there to help his fat-cat buddies. People are going to drive cars, and as long as that's true, auto makers will keep making them, and we will keep selling them. It doesn't matter who is president. We will survive.

Two faced/self serving/lying/cheating...Anyone who thinks that Romney can help anything deserves to have him in office.  ARGHHHHH!!!!!

Comment by James Schaefer on October 4, 2012 at 4:39pm

Thanks Chris & Joe for reading my post.  Anything to take care of the Automotive Industry is great with me!

Comment by Chris Tennant on October 4, 2012 at 4:31pm

Or you can vote for Gary Johnson and support TRUE free market economics! 

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