The Advantage Of Not Being Taken Over By The Government

The Washington Examiner is reporting today on the North American International Auto Show in Detroit.  The article points out that China is now the most important auto market in the world and that Ford is the only healthy automobile company left among the former 'big three.' 

The article points out:

"While nobody who has ever run a business would deny the difficulties created by inconsistent or unpredictable federal red tape, the alternative solution favored by Lutz doesn't make much more sense. He favors a "gradual increase in the federal fuel tax of 25 cents a year, which in my estimation would have the benefit of giving automobile companies a planning base, and giving families that own vehicles a planning base."  While this might make it easier for car companies to plan their lineups, there is another side to the Lutz proposal.  Higher gas prices would force consumers to buy more fuel-efficient vehicles, thus boosting sales of cars like the Chevrolet Volt electric plug-in appearing in dealer showrooms later this year." 

The danger here is a government-owned automobile company that can influence legislation to create a better market to sell its cars.  Ford, while declining to take federal money, has increased its sales and the value of its stock.  Traditionally Americans support free competition between their auto makers.  I would be a shame to see the government mess that up because they owned one of the companies!  When the government took over General Motors, I believe many Americans decided they would not buy GM cars. 

 I am hoping to replace my gracefully aging Ford Mustang convertible with a new Mustang convertible this year!  I would not even consider looking at a General Motors car.