Ford Motor is complaining about Germany’s scramble to help GM’s Opel unit, according to the FT - and with good reason. Its competitors are getting government help while arguably better-managed auto makers are left to fend for themselves. As the FT reports, Ford’s John Fleming contends government aid will help Opel compete more fiercely against Ford’s own European business. http://www.ft.com/cms/s/0/4ab6cc5a-4639-11de-803f-00144feabdc0.html Fleming, who runs Ford in Europe, is also “very concerned” about France’s state aid to PSA Peugeot Citroen and Renault, the FT quotes him as saying. Fleming calls on the European Union to keep an eye on government bailouts. Good luck with that! The FT story includes this remark from Fleming: “Ford believes it is vital that a level playing field is enforced to ensure a fair and equitable distibution of any assistance being offered, and that competition is not distorted.” The FT goes on to say that in the U.S., Ford has taken a different tack, welcoming bailout loans for rivals GM and Chrysler, and notes Ford itself obtained an emergency credit line. I wonder if in fact Ford is reading the politics differently in the U.S. versus Europe, and feels it has to go along with what’s happening in America.
It’s aggravating to say the least, both for Ford and for taxpayers, frankly. As Paul Ingrassia recently wrote in a Wall Street Journal op-ed, “While General Motors and Chrysler will emerge from the government restructuring wringer with significantly reduced debt, Ford will still likely be obliged to repay its lenders. This could put Ford at a competitive disadvantage — an unfortunate irony for the one Detroit car company that has gotten the decisions mostly right in the last few years.” Here’s Paul’s piece, “How Ford Restructured Without Federal Help.” http://online.wsj.com/article/SB124199912671905001.html
I cited this piece other day in my blog about buying a Ford Fusion hybrid when we move to the U.S. next month. This very car was given away to American Idol’s two finalists this week - another example of Ford doing something right – at least in terms of publicity!
May 22, 2009
However you look at it, the net effect is that automobile transportation is heavily subsidized. Drivers not only get free roads, freedom to pollute, and cheap gas, but the cars themselves are subsidized by taxpayers of many countries.