Sunday, July 12, 2009

How Does Obama's Car Czar Plan to Make Money for G.M.?

You know about the Cobalt, the Cruze and other compact cars that G.M. made? Get ready for a huge price increase.

It started in 2008 and will continue as Obama's idea of green cars in every driveway take hold.

Nolan Finley has an Op-ed on the G.M. takeover by the federal government.

It's impossible to believe that a president who is so thoroughly invested in reversing climate change will allow an automaker he controls to respond to consumer demand for pickup trucks and sport-utility vehicles. That's where the profits are, but GM's focus will have to be on the smaller, fuel-efficient cars Obama desires.

The pressure on the White House and on Congress from environmental groups will be enormous. Responsibility for those hated trucks and SUVs will now belong to Barack Obama, Nancy Pelosi, Harry Reid and Henry Waxman. They dance to the environmental movement's tune. If you want a GMC truck, better buy it now.

GM has an excellent plan for returning to profitability and private ownership.

But I don't believe the federal government will ever allow the automaker to implement it.

Where Finley misses the mark on the profitability of the change is; the precedent has been established on price increases on the small compacts to make them profitable.

There will be continued price increases on the compacts to make up for the loss in large profits made on the SUV's and pick up trucks.

Meanwhile the Conyers's hearings on the closings of certain dealers will held later this month.

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