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  • The Government Can't Sell Cars

    From left to right, Richard Wagoner Jr., Chairman and CEO of General Motors, Roger Nardelli, Chairman and CEO of Chrysler and Alan Mulally, President and CEO of Ford Motor Company

    As President Obama and Congress are starting to learn, it isn’t easy running American businesses from Washington. This week AIG threw bonuses in the faces of their new CEO’s on Capitol Hill, after Senator Chris Dodd (D-CT) specifically legislated that they could do just that. Senator Dodd is apparently wishing he hadn’t made that decision now.

    Now we learn that the auto companies that American taxpayers are bailing out an alarming rate are being forced into more bad decisions by lawmakers. Their new “bosses” on Capitol Hill are forcing them to “green” the cars they build at a rate faster than consumers demand, or that prices will allow. While the intentions of clean automobiles are admirable, it is a hard sell to a struggling economy to demand that the companies that we are bailing out because they can’t sell enough cars should be forced into making cars people don’t want to buy. Logical right?

    When gas prices were at $4 a gallon, Toyota couldn’t keep an expensive Prius on the lot for two days. But now that gas prices are at a more reasonable level and the economy is limping, consumers are choosing value over gas mileage. Now, most lots are carrying an 80 day supply of the expensive Priuses. The marketplace tends to work in this fashion, which is why it is never a good idea for politicians to get this deep into the everyday workings of American business.

    Rebecca Lindland, an auto analyst for IHS Global Insight told the LA Times; “The automakers are in the situation of needing to pacify politicians that are in the position to bail them out with expensive fuel-efficient cars, but shouldn’t it be more about satisfying the needs of the American consumer?”

    Ironically, even when gas prices were high, expensive hybrid automobiles weren’t making much money. Toyota finally turned a profit on the Prius in 2008, and those were extreme circumstances. Honda spokesman Chris Martin admitted; “If we were making money on the Civic hybrid, we weren’t making a lot.”

    Given Toyota and Honda’s history, and their status as the leading hybrid automakers, it would make perfect sense for GM, Chrysler and Ford to take a reasoned approach to the rollout of new hybrids. Unfortunately, President Obama and Congress won’t let them take any reasoned approaches that don’t give them the opportunity to push an entirely different social agenda that has nothing to do with saving taxpayers money.

    President Obama and Congress are off to a rocky start running America’s largest corporations. It makes you wonder how they’ll manage 4 million small businesses in America, as they hope to do under the Employee “No” Choice Act. Maybe it’s time Americans demanded that the bailouts stopped, and government return to doing what it is designed to do. The government is not designed to run your health care; it isn’t designed to negotiate every union contract in America; it isn’t designed to sell insurance; it isn’t designed to refinance mortgages; and it certainly shouldn’t be selling cars.

    Posted in Economics [slideshow_deploy]

    16 Responses to The Government Can't Sell Cars

    1. Darrell-Vancouver, W says:

      As a layman in constitutional matters, even I know the Federal government ( as evidenced by their tax policies ) know nothing about running private enterprise. And it is not their responsibility.

      Thanks, Darrell

    2. dmc222 Michigan says:

      The retooling it would take the big 3 to go as green as the new administration wants it to, would cost money the auto companies don't have. Where are they supposed to secure the money to do this, when our economy has people driving what they have as opposed to buying a bright, shiny, government green car?

      We can't spend as long as government is doing all the spending. My higher taxes and lack of retirement will not permit me to buy a car, new, green, or otherwise.

    3. cowgirl81 Texas says:

      My question is this. If we go to the eletric cars that the government wants us to go to, how are we going to pay for our electrical bills when our electrical bills go sky high? And on top of that when Obama and his followers tax the electric companies with all of their global warming junk and our rates go even higher. Why can't we drill for oil, gas, use wind power, solar, clean burning coal and nuclear. It seems to me instead of being single minded they should be using all of the above to help America be more energy efficient.

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    5. Ron, Derry NH says:

      I am sorry but government ineptitude when contained in Washington is bad enough. Now that they are spreading like a cancer into ever business in America we are doomed to fail.

      They can't run anything within budget or to a quality that is desirable other than milk the civilization of its value and add insult to injury.

      Chapter 11 would have worked fine.

      All congress wanted was the latest method use a cause, at our expense to seem heroic. They create issues where there are none and force social regulation so they can deem it their parties salvation.

      I am glad they have shown their incompetence, at least that they can not fudge and disguise with rhetoric.

    6. Brad S,, Detroit, MI says:

      The big thing that is lost in all of this is the real science of "Green" automobiles. I am sorry to pop anyone's bubble, but a Hybrid is really not that 'Green'. It still uses gas and has a Lithium-Ion battery. Lithium – like gasoline – is a non-renewable energy source. When everyone decides to get a Hybrid or a pure electric car, how quickly do we run out of the world's Lithium supply ? – most of which is NOT in the USA. Great – Some more foreign resource dependence . . .

      Oh, and most of the plug-in electric vehicles will get their energy from coal-burning electric plants. Not very 'Green'.

      And finally, did anyone tell people when they bought their Toyota Prius or Honda Insight that it would be about $4000 to replace their battery pack and another $1000 disposal fee for their original battery pack. (Let's see . . . . at about $2.00 a gallon for gas and 30 MPG, that repair alone is equal to about 75,000 miles in a conventional car.) No wonder they're not selling right now.

    7. Jerome Zacny says:

      I am sure that Senator Schumer has the answer. Any form of personal transportation, other than the type approved by him, will result in the owner being taxed at 91% of their income.

      That should be adequate incentive to get the job done.

    8. joe,gibsonia says:

      None of these alternative energy sources are by themselves the answer to our energy problems. This administration is fixated with reducing our use of fossil fuel while claiming it has the solution to our independence from foreign oil. This country will need oil far into the future, so let's quit fooling ourselves.

    9. Susan, VA says:

      Obama needs to be removed from office. So does Pelosi, Clinton, and the rest of these people who can't do their jobs correctly. I've been in the auto industry. It's not their place. They are struggling enough the way it is. Is anyone going to do what it takes to fire this administration? I will do it. I warned everyone I talked to that these things would happen, that the man was evil. Just a note on the hybrid battery and special electrical components-I did research and interviews with several warrenty companies and one day a man from a warrenty company walked into my office. His company covers the battery and special electrical components. For $600.00 a year. The batteries can cost you from $3,000. to $8,000. depending on where you go for them. You also have to know, in the event of an accident, what wires you can safely cut and what ones you dare not touch. Does Obama know any of this? Or is he just reading from his little prompt screen? Can I have his job? :)

    10. Steve, Nevada says:

      A few years back, the owner of a "legal" brothel here in Nevada, fled the US, because of tax evasion issues. The FEDS took over the business, and as usual, had all the answers and run the business into the ground. My point being, if the FEDS can't run a "whore" house, then how are "they" going to run all commerce in the US?

    11. Susan, VA says:

      And the Feds who can't run a whore house are running the White House. Does this explain the Clinton administration as well as our current administration? Baby Killers and whore house non-managers…they are lowering the integrity of the highest office in the nation down to this level of evil, harm, and calamity. It is getting to thte point that you cannot tell the difference between the White House Office and his administration and that of the whore house business and baby killers. How can I start the impeachment process before we are completely destroyed for lack of knowledge and lack of love and responsibility to the God Almighty who created the Govt.? Tell me this and I will go do it immediately.

    12. Lynn B. DeSpain says:

      It is not the Federal Government's job to sell cars, or energy, or alternate fuel, or anything that was not written into the "Original Constitution of the United States of America". We and they keep forgetting that this Counrty, this America is fifty independent Nation united under a Common Charter. That Charter's only purpose is to limit the Power of the Federal Government. That is what a Republec is!

      The bonuses at AIG, the Bailouts that we see in the "News", are but 'Red Herrings' to stop us from seeing where our money is really going! 185 million to AIG? What's that compared to 45 Billion to France? And they don't even like us! We're handing out Billions to Nations around the World, who are also in the U.N. that just called us 'Cheapskates', and they don't appreciate us either!

      My ideas, Stop giving money to anyone who does not like us and stand up with us. We pollute less than one tenth of one percent of the World's pollution. Scew that, Let's catch up a little! Put the lead back in the gas and get fifty percent more milage! Bring all our troops home from korea, France, Germany, Phillipines, and everywhere they don't want us!

      We need to publicly appologize for stopping Hitler, Mussolini, holding back Chairman Moa, Emeror Tojo, and all the others we save the World's butt from. We need to place all our soldiers right on the Mexican Border! Give all Illegals Ninety days to leave, then deport the ones we catch and keep all they own. You try sneaking across our bordr, do it under 'Live Fire". Stop sending more Billions to fight the Drug Cartels. Doesn't and has never worked anyway! Instead, legalize marajuana, and sell it like we do Liquor and regulate it the same way! Register the Heroin addicts, and they get their "Fix" at any pharmacy for a buck a day. No more roberies, murdeers, gangs. Anyone caught with Cocaine-felony, first time, with the three time loser law. Same for Crack, and Meth, and Exstacy, and all the other drugs connected to crimminal behavior. If its like wine-then fine. Limit Welfare to one child! Its hard to be hard, but we are only supporting your one mistake. Everyone is entitled to one! Don't do it again, because you're going to have to find a way to hadle it on your own! Dead Beat Fathers- one month to find gainfull employment, or chemical castration! Why should everyone else pay for your having "Fun"! And you best keep that Job, and Heaven help you if you have two, three of five babies, all with different Mothers. Physical Castration. No fooling around. It is time to wake up and take responsibility! While we are at it, let's have some equality in our schools, some equal representation! Say half the teachers Democrats and the other half Republicans! The kids might graduate confused, but not Socialist! We need to place caps on Law suits! Like that poor woman who got her hands and face ripped of by that ape. Sure she deserves money for all that disfigurement and pain and suffering, but fifty million? I don't think so, especially with the lawter getting a lot of that! Put a cap on it and put the other woman in jail! After all, they were both responsible adults in that case, weren't they. It would sure lower our insurance premiums, including Medical, and then we wouldn't need 'Socialized Medicine!"


    13. Tim/Ohio says:

      This is just another example of why the PRIVATE SECTOR was intended to run the businesses in this great nation. When it becomes entangled with the Government, it is doomed to fail, just like our Government has failed. Want to ruin a company? Just let the Government get involved. Remember the Reagan quote: "If it moves, tax it. If it moves to fast, regulate it. If it stops moving, subsidize it." That sums up why we are in the shape we are in right now. Wake up America!

    14. Jimmy Konogeris, May says:

      "There is no distinctly native American criminal class…save Congress." — Mark Twain

      "The tree of liberty must be refreshed from time to time with the blood of patriots and tyrants."

      –Thomas Jefferson

      "My reading of historyconvinces me that most bad government results from too much government."

      –Thomas Jefferson

    15. Pingback: AIG and Counter-Productive Rhetoric | Caffeinated Thoughts

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