WSJ: Treasury Department Gives GM Unfair Advantage

The Wall Street Journal gets its fair share of flak from TTAC. Now it’s time for a pat on the head. Under a downright TTAC-ish headline (“Treasury to Ford: Drop Dead”,) the WSJ lambasts the Treasury for being a bunch of unappreciative sumsabitches: “When the Bush Treasury decided to bail out Detroit, GM and Chrysler quickly said yes to the taxpayer cash, but Ford Motor Co. said it didn’t need the money and declined. Ford’s reward for this show of self-reliance? Treasury is now helping GM again by giving it a credit pricing advantage against Ford in the marketplace.”

Farago wrote: “If I were the head of Ford or Toyota or Honda’s lending unit, I would be mighty pissed.” The Wall Street Journal agrees. Now that the U.S. Government effectively owns GMAC, it gives them the money to offer zero percent financing – for GM products. Says the WSJ: “The messy little policy issue is that these GM products compete with those sold by Ford, Toyota, Honda and numerous other car makers that won’t benefit from GMAC’s cash infusion. And with the cost of financing often crucial to buyer decisions, the feds have now put the muscle of the state behind one company’s products.”

We haven’t seen the rest of it, thinks the WSJ: “With the taxpayers now having a stake in GM and Chrysler success, the Washington temptation will be to take other steps to help the two companies gain market share at the expense of their private competitors.”

It’s not just the heads of Ford or Toyota or Honda’s lending units that should be pissed. We, as the US tax payers, should be very, very pissed. Says the WSJ: “Your neighbor who buys a GM SUV this weekend with 0 percent financing should thank you when he pulls into the driveway. He did it with your money.”

And while on the topic of heads… The way this is heading is towards a WTO complaint. Countries, the U.S.A. included, have sued for much less egregious unfair advantage than that one.

PS: The Washington Post has a similar story. Their head is even more TTAC-ish: “Cash Guzzlers.” Except that they are not harping on about free enterprise. The Wapo is hitting the green angle: “through the GMAC bailout, the U.S. government is enabling GM to overcome (or try to overcome) the market’s resistance to its inferior merchandise — and it is doing so in a way that directly clashes with public goals such as conserving energy and fighting global warming.”