WSJ: Treasury Department Gives GM Unfair Advantage

Bertel Schmitt
by Bertel Schmitt

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.”

Bertel Schmitt
Bertel Schmitt

Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.

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  • Dolometh Dolometh on Jan 04, 2009

    I can see Ford willing to lose out on some cash for increased consumer confidence, but they probably didn't think it would be THIS much.

  • Mullholland Mullholland on Jan 04, 2009

    Instead of a GM Chrysler Bandit Boycott how about something more positive? Level the playing field and say no to government bailouts -- buy a Ford.

  • CanadaCraig You can just imagine how quickly the tires are going to wear out on a 5,800 lbs AWD 2024 Dodge Charger.
  • Luke42 I tried FSD for a month in December 2022 on my Model Y and wasn’t impressed.The building-blocks were amazing but sum of the all of those amazing parts was about as useful as Honda Sensing in terms of reducing the driver’s workload.I have a list of fixes I need to see in Autopilot before I blow another $200 renting FSD. But I will try it for free for a month.I would love it if FSD v12 lived up to the hype and my mind were changed. But I have no reason to believe I might be wrong at this point, based on the reviews I’ve read so far. [shrug]. I’m sure I’ll have more to say about it once I get to test it.
  • FormerFF We bought three new and one used car last year, so we won't be visiting any showrooms this year unless a meteor hits one of them. Sorry to hear that Mini has terminated the manual transmission, a Mini could be a fun car to drive with a stick.It appears that 2025 is going to see a significant decrease in the number of models that can be had with a stick. The used car we bought is a Mk 7 GTI with a six speed manual, and my younger daughter and I are enjoying it quite a lot. We'll be hanging on to it for many years.
  • Oberkanone Where is the value here? Magna is assembling the vehicles. The IP is not novel. Just buy the IP at bankruptcy stage for next to nothing.
  • Jalop1991 what, no Turbo trim?
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