Dissing dealers

As part of their bankruptcy agreements, both Chrysler and General Motors sought to cut dealerships in order to develop a more efficient and profitable distribution network.

It was a sensible move.

But now, members of Congress are again highlighting why it's a bad idea to have politicians and bureaucrats running a major automobile manufacturer.

Pressured by dealers who got cut loose -- GM will lose 2,000 of 6,000 dealers, while Chrysler will drop about 800 of 3,200 -- House members appear prepared to pass legislation forcing the two companies to restore all their franchise agreements as a condition of government bailout money.

This is a really ridiculous proposal on a number of fronts.

In the first place, state "franchise" laws shouldn't exist at all -- they are protectionist in nature and harm consumers by limiting the auto distribution network.

In addition, if the bill passes Congress will be intervening in a judicial bankruptcy proceeding, setting the stage for all sorts of lawsuits.

Finally, why in the world would Congress seek to undermine efforts by either company to control costs and impose a more efficient business model? Proponents of the measure insist it's about saving jobs, but far more jobs will be lost if GM folds thanks to congressional meddling.

Thankfully, the Obama administration vigorously opposes the legislation and Senate Majority Leader Harry Reid said it is not a top priority in the upper chamber.

Still, it should be another warning for both companies that they must throw off the government yoke as quickly as possible.