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Another Toyota Recall? Fed Safety Board Marketing Arm of GM

Government Motors Manipulate the Marketplace

Market Manipulation?

WASHINGTON (or is it Detroit?): Just as one Federal investigation of Toyota is winding down, the National Traffic Safety Administration announced today that they are launching an investigation of possible flaws in Toyota’s steering system, this time in the bread and butter Corolla line:

The National Highway Traffic Safety Administration will open an investigation into a possible flaw in the steering systems for the 2009-2010 Corolla, likely to lead to another massive recall for Toyota, ABC News has learned.

NHTSA says it has received 163 complaints about the steering causing the Corollas to veer from side-to-side. A number of accidents and injuries have been tied to the issue, according to federal officials. ABC News

While the NIP does not dispute the seriousness any Toyota car accident, we do have serious questions about the frequency of charges leveled against the automaker by the Federal government. Could the steady barrage of charges against the automaker be market manipulation?

It wasn’t so long ago that Toyota was vying to be the number one automaker, the car of choice for the value-conscious consumer. GM appeared on its last legs due to its declining market share and extremely high labor costs. Indeed we were told that GM was on the brink of survival and needed massive cash infusions from US taxpayers to even keep the doors open.

GM was saddled with draconian labor contracts that added $1,635 per vehicle on health care for active and retired workers in the US. Toyota costs were $215 for active laborers, and zero for retired workers. Union work rules added  another $630 per vehicle to every car, compared to zero for the Japanese firm. If GM wished to idle a plant for any time at all union rules required it to pay union workers 95% of their take home pay plus all of their benefits. (2007 figures reported by CNN.) The sweetheart deals cut with big labor threatened to strangle the GM golden goose.

Fortuitously for the unions the 2008 Presidential election rolled around. Rather than make concessions to help GM become more competitive, the unions pumped over $60 million into the Democratic campaign, electing Barack Obama. GM was nationalized,  bondholders were stiffed (read your retirement plan), and unions walked away with 17.5% ownership cementing their permanent control over the automaker.

Today finds union leaders being the most frequent visitors to the White House. The constant pummeling of Toyota by Federal officials it makes us wonder how many of the recent charges are overreactions calculated to smear the Japanese automaker to the benefit of Government Motors.

While such a charge is beyond the resources of the NIP to prove, the point is that we shouldn’t have to prove it. The government should not be involved in private enterprise. When it is, the impartiality that we depend upon to ensure justice is compromised.

Do you really think that James Madison intended for the US government to become the biggest automaker in the world? How do you think Thomas Jefferson would react if next fall’s GM lineup included the 2011 Jefferson Jettabout?

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  1. NIP Staff
    March 2nd, 2010 at 10:50 | #1

    Correction: 2009 took the automaker Toyota to the number one spot in worldwide production.

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