Underlying Barack Obama’s support for bailing out the U.S. auto industry has always been the notion that federal bureaucrats and environmentalists know better than Detroit executives what kind of cars should be on the market.
And it’s no secret what kind of cars Mr. Obama and his progressive allies would like to see Detroit churn out: Boxy “green” models that eventually wean Americans off of evil internal combustion engines.
Oh sure, Mr. Obama has paid lip service to reworking the union contracts that Big Three leaders signed off on for years in an effort to ensure labor peace while pushing the day of reckoning down the road until they were safely retired.
But the ultimate goal of his auto industry rescue will be to dictate to Detroit — even more rigidly than before — precisely what it must build.
“This restructuring,” the president said in a recent address, “as painful as it will be in the short term, will mark not an end, but a new beginning for a great American industry … that is creating new jobs, unleashing new prosperity and manufacturing the fuel-efficient cars and trucks that will carry us toward an energy-independent future.”
The problem with all this should be obvious, but apparently isn’t to many in the administration: These wonderful green cars aren’t always favorites of consumers.
Thus, the Los Angeles Times reports this week, that Obama’s “vision” requires another spike in gas prices to get buyers more interested in high-mileage, low pollution vehicles. And, “Second, the cars Detroit produces must satisfy consumer tastes and preferences. Marketing data show that a vehicle’s size and the image it bestows on its driver play major roles in buyers’ decisions.”
Wow, really? Consumers want a product they like and enjoy? What a concept.
It’s something Mr. Obama should consider as his administration meddles in the boardroom — and if he does, he probably won’t like what finds.
For instance, the Times reports that Mercedes-Benz and BMW sold more than 33,000 cars in March, which represents a 50 percent larger market share than all hybrids combined.
The notion that Detroit ignored the fuel-efficient market is utter nonsense. Over the past 30 years — after the disastrous decade of the 1970s — Detroit has produced dozens and dozens of high mileage models, but they were too often ignored by buyers. Government mileage requirements practically dictated product lines, forcing General Motors, Ford and Chrysler to make vehicles that lost money in order to meet Washington’s fleet standards.
Yes, American automakers made mistakes. Yes, at times they have lagged behind Japanese and European competitors in terms of price and quality. And, yes, the market for “greener” cars may eventually attract more than just feel-good niche consumers.
But the idea that the president can save the domestic auto industry by strong-arming companies into making vehicles that many consumers don’t want is folly — and arrogance of dangerous proportions.