AutoNation, a retailer worth billions, says it received nearly $80 million in SBA funds

[Eugene]

Source: Washington Post

AutoNation, a retailer worth billions, says it received nearly $80 million in SBA funds

Employees speak out, saying the company took ‘an obscene amount,’ and the board votes to return funds to the government

By Jonathan O'Connell
April 24, 2020 at 3:50 p.m. EDT

AutoNation, a national network of auto sellers, received more than $77 million in federal small-business funds despite being a company worth billions that employed more than 26,000 people before the pandemic.

In response to questions from The Washington Post, AutoNation Executive Vice President Marc Cannon said that the company’s board voted Thursday to return the funds even though the company had acquired them under the rules created by Congress and intended to use the money only to pay employees.

The Post reviewed documents detailing the AutoNation loans and interviewed two employees of the business, who spoke on the condition of anonymity because they were not authorized by the company to discuss the matter.

Documents show the company may have received even more money, a total of $95 million, spread across dozens of locations, an amount that would be more than triple the amount any company is known to have received through the fund. AutoNation disputes the $95 million figure.

The $3 billion firm, which is publicly held, had 26,000 employees in 18 states before the pandemic. AutoNation used separate tax identification numbers assigned to dozens of its more than 300 locations to apply for at least $266 million in funds for separate dealerships, including Jaguar and Land Rover of Bethesda, Porsche Orlando and Lexus of Cerritos, outside Los Angeles, according to the documents.

-snip-

Read more: https://www.washingtonpost.com/business/2020/04/24/autonation-an-auto-retailer-worth-billions-received-nearly-95-million-sba-funds/

[Harker]

1. Summary... 'S' stands for 'small.'

Sheesh. Leave it to republicant's to plunder, or allow to be plundered, every source of money.

[Ferrets are Cool]

2. This. nt

[Igel]

10. The "SBA" loans weren't SBA loans.

They were funneled through the SBA because there were mechanisms for that in place.

It's like the HHS channeling the first tranche of aid to hospitals using the Medicare fund-distribution network. The funds weren't Medicare, needed distributing, and there was a mechanism for getting the money distributed. Why not use it?

As some corporations have said, it was according to the language in the law that the House and the Senate passed and Trump signed. Lots of people said they had sufficient oversight and had vetted the language. Apparently they were wrong--but the response is to blame somebody else when the House and the Senate both agreed to the language.

Still, the loans at $50 M and above were less than 10% of the total. The media don't say that because it's not a fact that supports the message.

[Harker]

13. Sure was big of them to return it, then. n/t

[KPN]

3. What I want to know is how in the hell did

big companies like this get these small business relief funds awarded to them in the first place? Who recommended, reviewed and authorized these awards? Was it sheer incompetence or were kickbacks involved or both?

This stuff should never have happened in the first place. Now we have Mnuchin standing up before the press and saying the Treasury Department is going after these big corporations demanding they give the money back; as if they are doing a great thing for the taxpayer and actual small businesses. He’s spinning the whole thing like his Department should be lauded for its efforts. And the media seems to be going along with that.

My opinion. There’s much more to this than we are being let in on. And the media is once again failing at its job. Question number one should be how did this happen in the first place Mnuchin. Give us an account of that!

PS — we also have corporations taking credit for giving the money they should never have got back. Did they apply for it? More spin?

[WhiteTara]

4. They filed as individual dealership

rather than under the corporate umbrella.

[Harker]

5. Perhaps there's been some oversight

in the oversight.

republicant's are, by nature and disposition, accomplished professional looters.

[Hoyt]

6. Because the law specifically allowed the number of employees at each location to be considered in

many cases.

The Cares Act allows separate affiliates of a single corporation to apply independently for small business funds. The Small Business Administration started asking larger, supposedly well-funded companies, consider returning those loans.

I'm assuming that is because many big corporations -- like McDonald's, Ruth's Chris, etc. -- have franchisee's who will have to decide whether to keep employees on if business is down. That was the purpose of the law in the first place, to encourage businesses to keep employees on the payroll.

[KPN]

8. Thanks. So as usual, it's how the law was

written. And as usual, it tends to favor corporations over genuine small businesses, i.e., privately owned businesses with relatively few employees. Easier to give and administer one grant involving a lot of money to a company with 499 employees than a lot of small privately owned companies with 5, 10 or even 40-50 employees.

The devil’s in the details. In crisis mode, the devil with details.

[Igel]

11. Consider the primary purpose of the money.

It was to keep the employees on the payroll, keep them receiving a salary.

We focus on "small business" versus "corporation", but we're really talking about a way of keeping their employees receiving pay.

Are the employees of AutoNation any less worthy of this than the employees of Mi Pueblo Auto Sales (a 3-location used car dealership in Houston) or Maroney Auto Sales (which only has one location)? Maybe they're not really 100% people--so Maroney's are 100% human, Mi Pueblo's is 96% human, but AutoNation's employees are only 80% human.

And, yes, it is easier to administer a program where a particular participant helps you to pay 300 people their salaries than 30 participants with 10 employees each. For the same reason we like malls and supermarkets, instead of going to a lot of little stores. In Prague it was annoying in the '90s--greengrocery #1 for this, a second for fruit, then there's the bakery for the bread and a butcher for the meat, and the dry goods store for things in cans and bottles and the stationer's for writing paper.


We said we liked the purpose of the program, but either we didn't really understand it because we just glanced at the 280-character summary or decided to revise it after the fact.

[KPN]

12. Good points, but it comes down to what we

value as a business (and ultimately economic) model. Economies of scale work well regarding profits, but not as well for society when you consider impact on wages over time, impact on other labor issues over time, impact on small communities, impact on really small businesses (locally owned private businesses) from competition with publicly owned corporations. Yeah, they all have workers, but over time economies of scale have resulted in trading off employee benefits and work conditions and public health for consumer prices.

Which do and should we value more?

[GemDigger]

7. I wonder how much has he donated to the TrumpGOP?

[dlk]

9. This is why oversight is critical

There are always vultures eager to scam the system.