Should we nationalize the Big Three?
(Read article summary)As lawmakers debate a bailout package for the troubled Big Three automakers this week, we're seeing a word rarely spotted north of Venezuela or west of Scandinavia: nationalization.
As lawmakers debate a bailout package for the troubled Big Three automakers this week, we're seeing a word rarely spotted north of Venezuela or west of Scandinavia: nationalization.
Last week the Los Angeles Times ran an op-ed by Pulitzer Prize-winning automotive writer Dan Neil, unambiguously headlined Nationalize GM.
An outright federal government purchase of GM would have many benefits, argues Mr. Neil. A state-owned General Motors would be able to quickly void onerous contracts. GM is already competing with companies abroad, like Honda and Toyota, that are already quasinational, what with their government-provided healthcare and pension plans. And Uncle Sam could avoid many of the strategic failures – such as betting on SUVs instead of hybrids – caused by short-term, quarter-to-quarter thinking.
A state-run GM could help the US transition to cleaner cars and trucks. Neil writes:
We need government-sized automotive help anyway. This country should be putting millions of plug-in hybrid and electric vehicles on the road. As far as I can tell, without big subsidies, there is no way in the near term to build these vehicles and make a reasonable profit, due to the stubbornly high cost of advanced batteries. Besides, if GM were owned by the government, it wouldn't spend time and money litigating and lobbying against clean-air and safety rules.
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