When the government runs an auto company, it decisions will be made for political reasons, not business reasons. Thus, GM’s new small car will be manufactured in Michigan, rather than its more efficient plants in Wisconsin or Tennessee. The more efficient plants will be closed. (Via Kausfiles, via Instapundit.)
In fact, the small car initiative itself is foolishness. As the Wall Street Journal pointed out, Detroit ought to be focusing on expensive cars, which could dilute their high labor costs better. But they cannot, because CAFE standards require them to manufacture lots of light (i.e., cheap) cars. Now that the government controls GM, it’s pushing GM further in the wrong direction.
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