What's So Wrong with Obama Motors? [Mark Steyn]
Re my post below, a reader writes:
I accept the proposition that some car dealers are seeing their investments ruined, though I don't know the details.
But it's entirely unclear to me how the Obama administration is doing wrong in this. These car companies are failing. Without government support, they will collapse...
With government support, some dealerships will survive. That's the best anyone can hope for. And the fact that the government demands an ownership stake for its many billions of dollars in capital is – as best as I can tell – simple, straightforward economic fairness to the government and the taxpayers...
How again is Obama the villain in this piece – unless you insist that Obama magically transform the auto industry and save every job, every dealership, etc.?
Obama is the "villain" because he prevented the legal bankruptcy procedures in order to create (to the severe detriment of the company's bond and stock holders) two union/government-owned automakers.
Under traditional bankruptcy restructuring, the various GM/Chrysler brands — Chevy, Dodge, etc — would have wound up in the hands of new owners, domestic and foreign, willing to make a go of them. Instead, Obama and his car czars have delivered these marques into the formal control of the unions (the ones who got the companies into this mess) and of the government — which cannot run a car company. Why? Because it will make decisions for political rather than business reasons. And unions will make decisions for the "workforce" rather than the market. At the moment the GM/Chrysler unions cannot make a car at a price anyone is willing to pay for it. Why give them the companies?
Those of us who've lived with government car companies know how this story ends: see Iain Murray's column today — and, for a precis of life under a union/government alliance, ask Iain to explain the British expression "Beer and sandwiches at Number Ten."
I love American cars. I have a Chevy truck, Chevy SUV, the whole Steyn fleet. But I will never buy another Chevy until it is restored to private ownership. When GM sneezes, America catches a cold. When GM is put on government life-support, it's America — and the American idea — that's dying.
The Corner on National Review Online (22 May 2009)
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