Summary
After the Chrysler filing it was clear that Washington was preparing the same fate for GM. Politically, protecting the unions was predictable. Bottom line, the auto makers have to design, produce and sell what consumers will buy. Washington wants to force Chrysler to build "fuel efficient" vehicles. Will the average consumer buy them? Only if higher fuel prices or consumer tastes shift in that direction. Washington must consider adopting an energy policy, not dabbling in business.
Analysis
Mr. Obama's adminstration is dabbling in business while the big picture is left unclear. Forcing GM and Chrysler into Chapter 11 was inevitable, given the economic crisis we face. That was Washington's doing, too.
Certainly the workers need some protection. As usual Washington is is offering short term solutions and ignoring the long term. "Quick fix" is the M.O. for politicians.
Giving financial haircuts to investors is not the solution to the auto industry's problems in the long term. Adopting a clear and well thought-out energy policy is. Consumers decide what kind of vehicles they want to buy, not Washington. We are headed for a consolidation to two, or possibly even one, US auto companies. Washington's dabbling in the auto business is only delaying the inevitable.
