Is GM destined to crash?

Hatchet
By Lucas Roebuck

One of the great ironies of the fall of General Motors and Chrysler was how red America's patriotic ethos to buy American was what kept those companies afloat - and Democrat-contributing uber-high wage union workers in their jobs - for years if not decades.

Drive on the freeways of the blue state coasts, and you'll find a disproportionate number of foreign-made cars. In the American heartland - Republican strongholds - Chryslers, Fords and GM automobiles have traditionally dominated the roadways.

I'd bet my old 1966 Plymouth Valiant (if I still had it) that if Gallup did a poll today, we'd find that Republicans are far more likely to drive American-made cars than Democrats. In fact, an article in the The New York Times in 2005 reported that, indeed, Republicans bought American, and Democrats bought foreign cars, according to Scarborough Research, a New York market-based firm.

Interestingly enough, according to the Times, staunch Democrats drove sports utility vehicles just like Republicans - but the Democrats preferred foreign-made SUVs.

I don't want to debate the general merits of the quality and value of American cars versus those coming from Europe or Asia. I myself found an uneasy compromise in the last car that I purchased - a used Mazda 5 minivan. Not an American car, to be sure, but the Ford Motor Co. has a majority stake in Mazda (perhaps one of the reasons Ford avoided the fate of the rest of the former Big Three). So I rationalize my purchase by saying I drive a Ford. Sort of. (Yes, I don't sleep well at night.)

However, I know many Americans (including myself ) that paid a little more for a little less car at some point in the last few decades to buy American out of a since of patriotic duty. Buying American made American companies stronger, helped keep jobs in America and made the country stronger. Wearing your patriotism on your sleeve when car shopping has always been a heartland Republican activity.

So by getting into bed with the Democrats who bought cars mostly from their international rivals, the American automaker unions were biting the hand that fed them. No matter. Obama was happy to use money borrowed from our grandchildren to pay off the unions for their loyalty and contributions over the years to his party.

Now the government and the unions own what's left of GM. The Obama administration should sell off its stake as soon as possible, but that would be inconsistent with Obama's socialist march to the left. So don't expect the government to get out of the car business anytime soon.

Here's the problem now. Who is going to buy GM cars? Certainly not the Republican patriots who have been propping up GM for so many years. Maybe some Democrats who follow the commands of our supreme leader will do so - but, for the most part, I don't see Democrats changing from their buy-American-last ways. Do you really think that the people who buy the cool Toyota Prius are going to line up in droves to buy the nerdy Chevy Volt?

Even the new GM seems doomed to fail, sort of. Obama's new, greener GM is making cars that people in a recession just don't want or can't afford. For example, consider the Prius. Under the Bush recession, Priuses sold pretty well. Now that we have moved into a Category 5 Obama recession, Prius sales have dropped 50 percent. Democrats, like most Americans, are more high-minded when they have lots of cash to burn.

Toyota loses thousands of dollars on each Prius sold. Likely government subsidies from Japan and American tax incentives for buying hybrid cars mask the price point problem of hybrid/green cars. It's unlikely that a GM run by Obama cronies who have little auto experience to begin with are going to find a way to make hybrids/greens profitable if Toyota - a very efficient car company - can't.

Of course, what this means is that Obama is going to have to stack the deck in GM's favor - likely at the expense of the last great American car company, Ford. Whether by targeted subsidies, or mandating that government agencies buy only GM cars for the federal fleet, I am not sure. But the government just doesn't have a financial stake in GM, but a political one. The success or failure of the new GM will be credited to Obama - so he has an incentive to do whatever it takes to make GM work, even if that means short-circuiting fair competition with Ford (or Toyota or Honda, etc.).

Because this government interference is absolutely bad for America, I hope patriotic car buyers will not buy GM cars, and instead look to Ford, or even American startups like Tesla Motors (makers of really cool electric-only cars) when buying a new set of wheels.

I am not advocating protectionism for American carmakers. I believe in free markets, so the government shouldn't tell you that you have to buy an American car. I believe in freedom of choice, so the government shouldn't tell you that you have to buy a green car.

But just like those who are concerned about the environment are to be commended when they voluntarily spend a little more to buy a green car, let's also praise the patriots who voluntarily spend a little more on American cars - at this point, Fords - to strengthen the American enterprise.

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