Clunkers greens foreign competitors’ bottom line (HP)
Congress continues to pat itself on the back for its clunkers “stimulus,” hoping that no one notices the details. The latest embarrassment: Having spent $80 billion in taxpayer money to bail out Detroit, federal data confirms that Congress designed a clunkers taxpayer subsidy that boosted the sales of foreign cars.
The disconnect comes from placing green religion over business sense. Were Congress really interested in helping domestic car companies, they would have made the clunkers rebate available to all vehicles, not just fuel-efficient ones (new cars had to get at least 22 mpg to qualify for the $4,500 rebate; trucks 18 mpg). After all, struggling Chrysler’s most competitive products are trucks, not small sedans. But determined to force its green morality on Americans, Congress punished domestic automakers by walling off their more profitable large vehicles from buyers.
The result? Buyers flocked to the small cars Asian manufacturers do best.
For example, according to NHTSA, when buyers traded in a Detroit-built “clunker,” 58 percent bought a new foreign car. When customers traded in a foreign car, by contrast, only 14 percent bought a Big Three vehicle.
Congress is all for green, even if its means putting our Detroit investment further in the red.