Monday, June 1, 2009

Government Motors -- Part II

From "mark of excellence" to mark of ignorance.

We really hope we're wrong, but nationalized General Motors will fare no better than publicly-traded General Motors.

For all the hype and all the proposed restructuring, GM is stuck with the same problem that brought it to where it is today.   As a heavily unionized company facing low-cost competitors, GM can't pass along to consumers its full labor costs.   The only way left to compete on price is to continue to reduce the quality of its products.   Japan makes cars that are better, and Korea makes cars that are both better and cheaper than GM.

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