From The Financial Times June 19 – The Lex Column – “Government Motors”
General Motors and Chrysler car dealerships are using some of their political donations over the years to avoid being closed down. So far between 15 and 20 dealerships that were slated to be closed, have been kept open by political pressure from Washington politicians. There is also a pending law that would make further dealer closings tougher than it is now.
The most egregious political interference so far has been actions by Rep. Barney Frank (D) of Massachusetts. He has intervened on behalf of an auto-parts distribution facility in his district that was to be shut down. Senator Lamar Alexander has noted that Barney Frank’s actions “make it harder for the auto companies that your government owns to compete in the world marketplace.”
President Obama has succumbed to the temptation to meddle with the details of car manufacturing as well. Details have emerged that the United Auto Workers union successfully lobbied the Obama administration to shift a planned GM car plant from China to the US. The additional labor costs per vehicle could reach $1,000 per car. That is a significant competitive disadvantage.
US taxpayers are already deep in the hole on their $62 Billion investment in GM. Continuing political interference will surely make the matter worse, and give credence to the moniker, “Government Motors”
