I agree with your point in general, Jonah, but I have one nit to pick. I’m less sympathetic to Ford’s plight than I would be if the company hadn’t publicly supported the bailouts for GM and Chrysler. At the time, Ford’s stated fear was that the collapse of GM and Chrysler would create disruptions up and down the supply chain, and that these disruptions would hurt Ford. Do I think Ford is happy with the way things turned out? Not really. I think the company was hoping that the government would keep GM and Chrysler on life support without giving them a competitive advantage. Of course, as you point out, the Obama administration now has an incentive to turn GM and Chrysler into success stories, and it won’t let fairness to Ford stand in the way. But Ford picked its poison when it asked the government to bail out its competitors.
The greater concern is the, as the Journal put it, “raw trade protectionism” at the heart of the GM restructuring. The Treasury has made the sale of GM’s German Opel unit conditional on the buyer’s agreement not to export small cars to the U.S. Our tariffs on imported trucks and SUVs remain a sticking point in the stalled negotiations over a trade deal with South Korea (which is going nowhere under this administration). And the government rescue of GM and Chrysler is itself a form of protectionism — the foreign transplants that employ thousands of Americans at factories in the Midwest and the South did not ask for or receive a bailout. When the government picks winners in the market, the loser is almost always the consumer, who ends up paying higher prices to subsidize inefficient producers. And if the consumer is a taxpayer, he usually ends up paying twice.