Planet Gore

Washington Punishes Toyota . . . and Detroit

Detroit – Auto bloggers smirked this week at General Motors’ chief shareholder fining rival Toyota a record $16.4 million for “failing to notify (it) of the dangerous ‘sticky pedal’ defect for at least four months until an official recall was announced in late January.” The penalty — 16 times larger than the previous record ($1 million against GM in 2004) — represents an effort by NHTSA chief Ray Lahood to cover his agency’s keister (since the feds knew that Toyota was battling sticky pedals when it handed over incident reports to NHTSA and warned of floor-mat interference in November).

Toyota’s real punishment is a two percent market-share hit through the first quarter of this year and a corresponding 13 percent drop in stock value. The greatest beneficiary of Washington’s slap? Tort lawyers who will file it as Exhibit A in coming trials against the Japanese automaker.

Surely, GM itself owes little thanks to its new owners. If Washington were truly interested in resurrecting its investment it wouldn’t be punishing its prodigy for making what it makes best: light trucks.

As Jerry Flint of Forbes points out, “GM had 19.9 percent of the car and light truck market last year, Ford 16.1 percent and Chrysler 8.9 percent. The problem is that most of those sales were pickup trucks and larger sport utilities. Because of the government push on fuel economy, sales of these will decline over the next decade as sales of cars rise.”

That’s right. GM’s biggest investor is tying one arm behind its back and forcing it to fight with its weaker wing.

Continues Flint: “Americans disdain Detroit’s cars. GM sold only 945,000 cars last year, or 46 percent of its car-truck total. Ford sold 637,000, 38 percent of its total. Chrysler sold 247,000, accounting for 27 percent of sales. Make, if you want, a model-by-model comparison. The pride of the GM car operation is the Chevy Malibu, a family-size sedan. It’s a good car, but it’s outsold by the comparable Toyota Camry better than 2-to-1 and by the Honda Accord by almost 2-to-1.”
With friends like these . . .


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