Government Motors

When GM turned down production of a new car from Right to Work Tennessee and kept it in Michigan we figured it was a political decision not a business one.  It now appears we were right.

The Wall Street Journal reports that Tennessee officials that were hoping to lure production of the new Orion car of the Volunteer State were shocked when decision makers at GM proclaimed that ” the first two criteria were “community impact” and “carbon footprint” — or how the choice would affect unemployment rates and carbon-dioxide emissions.”  In other words the decision was based upon the whims and desires of politicians not the needs and realities of the marketplace.

“Those didn’t strike us as business criteria at all,” said Tennessee Sen. Lamar Alexander, who was joined in the meeting by fellow Republican Sen. Bob Corker and the state’s Democratic governor, Phil Bredesen. Those factors, Mr. Alexander said, “seemed odd for a company struggling to get back on its feet.”

The UAW has already gotten government officials to ensure GM would not produce the new Orion in China.  Members of Congress like Barney Frank (D) have used their influence to ensure plants in their districts remain open.  Even the production of the new compact car is leaving analysts questioning “the logic of building a compact car in the U.S. Margins are so tight that even Toyota and Honda have opted to build their smallest models in countries with lower labor costs. …Estimates peg GM’s losses on U.S.-built small cars at roughly $1,000 to $2,000 per vehicle sold in recent years. Lawmakers and congressional staffers involved in the compact-car competition said GM acknowledged the company expected to struggle to break even on the venture.”

GM has become a tool for government and the UAW to make unprofitable business decisions while living off the hard earned monies of the taxpayers.  It’s a recipe for disaster both for the workers of this once great company and the taxpayers who are footing the bill for all this nonsense.