Is Obama’s Politics Destroying Government Motors?

The Obama administration seized control over GM for several reasons: they wanted to extend their control over the American economy; they wanted to give some of it to the unions in exchange for campaign kickbacks; and they wanted to put another part of their political agenda to work. The political agenda part has to do with transforming the way we go about our daily travels, and their motivation is a defunct superstition called “global warming”. The rest of the world is thankfully beginning to come to its senses and walk away from the ridiculous Kyoto Protocol (thanks in good part to Climategate).

By seizing a controlling share of GM, the Obama administration has managed to turn a once-great car company into Government Motors. They have gone to work with electric cars without the slightest concern for what kind of reality they are stumbling in to. Their long-term ambition is of course to put us all in plug-in electric vehicles, without even once considering the enormous repercussions this would have on the production of electricity in America.

As a step toward their central planning of all our transportation, the Obama administration made GM pour all its resources into bringing the ludicrously expensive Chevrolet Volt to the market. This is an allegedly environmentally friendly little car with batteries that will do God-knows-what to the environment once they wear out. It does less for its owner than the Toyota Prius, yet costs 50 percent more – even after the owners of Government Motors (i.e., the federal government) has given its buyers a $7,500 tax rebate. The Volt has a much shorter operational range, it is smaller and less versatile than a Prius. So instead of trying to best Toyota (a private company that developed the Prius on its own research and development funds) Government Motors went ahead and put out the Volt.

Predictably, the Volt’s sales figures are more than a little disappointing.

The Volt is not really a car. It is, at best, politics in motion. But the politics of car manufacturing do not stop at simply putting the Volt out on the market. It seems that Government Motors has also allocated its product development resources according to political preferences. In the latest car review issue of Consumer Report, once-highly ranked GM vehicles have taken a reliability tumble (get the data here through subscription or buy a print copy at your local news stand). Not since the 1990s has GM suffered from such poor reliability in its products. Even Buick, a long-standing hallmark of quality within GM, now struggles with reliability problems.

But what is most interesting about the reliability report is the contrast between the Volt and the Cruze. In essence, the Cruze is a Volt with a traditional, though admittedly anemic, gasoline engine. While the Volt is at the top for first-year reliability – giving Toyota a run for the money – the Cruze is at the bottom of the scale.

No car company today can afford to release a model that gets poor reliability ratings in its first year. GM only needs to go back in its own history (Cadillac Allante, anyone?) to learn that lesson all over again. Yet that is precisely what Government Motors has done with the Cruze, which competes against quality masters like Toyota Corolla and Honda Civic and serious quality contenders like Hyundai Elantra and Ford Focus.

It takes a lot of work to produce a car with high quality and strong reliability. Back in the ’70s and ’80s Toyota and Honda showed the Big Three Americans how to do this. GM learned the lesson and pulled itself up by the quality bootstraps during the ’90s. About a decade ago Hyundai put a five-year reliability plan to work, which has paid off remarkably in the Consumer Report ratings. Ford has also made significant advances in quality. So when GM is letting its vehicles slide, it is going against better judgment.

The fact that the Volt is getting first-rate reliability ratings shows that the company has not lost the know-how on reliability – but the fact that other cars from the same manufacturer are losing reliability indicates that Government Motors has re-allocated resources to meet political product demands, not the demands from the market.

The Obama administration took over GM to save it. Unless GM shapes up and starts learning from its private competitors, that takeover will turn out to be a kiss of death. The best way to do that would of course be to get government out of GM entirely, and do it fast. But time is runing out. GM’s competitors, who are free of political micro-management, are not sitting on their hands. Toyota has just released an outstanding new Camry, Hyundai’s recently revamped Elantra has knocked out its competition in comparison tests, and the Ford Fusion is currently the highest-ranked quality car on the market.