From Tim Blair:
When in charge of markets, governments tend to deliver what they think the public should buy rather than what the public wants to buy. Which is how things are shaping up for GM, now under majority government ownership. Last month the carmaker planned to shut its Orion plant:
But a few weeks later, the company reversed course. GM now says it will retool Orion to make compact, gas-sipping cars. The change of heart says a lot about how GM’s new owners – the federal government owns 60% of the company and the United Auto Workers (UAW) owns 17% – are making considerations other than profitability a top priority for the auto maker.
Because if profitability were a priority, the Orion plant might be re-tooled to build something even larger than the mid-size sedans it’s currently producing:
As Ford looks to reinvent itself with smaller, energy efficient vehicles they are faced with the stark reality that as of late May their Ford F-150 series continues to outsell the Toyota Camry.Let that sink in for a moment. The best-selling truck in the U.S. still outsells the best-selling car …
There is a widely-held view outside the US (and within it) that the US auto industry is in crisis due to producing the wrong vehicles – behemoths, when everyone wants capsules. This isn’t so, as even Barack Obama knows. The main problem lies elsewhere, as Mark Steyn has pointed out:
GM has 96,000 employees but provides health benefits to a million people.How do you make that math add up? Not by selling cars: Honda and Nissan make a pre-tax operating profit per vehicle of around 1600 bucks; Ford, Chrysler and GM make a loss of between $500 and $1,500. That’s to say, they lose money on every vehicle they sell.
Solution: keep making the popular trucks, but cut the gigantic corporate socialism. Oh, and appoint Iowahawk as US car czar:
Obama – a Hemi man himself, when allowed his choice – is headed in the opposite direction: too small to fail.
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