A Troubling Condition Of The Detroit Bailout

Running through some articles I came across this in the NY Times.

Lawmakers drafting the auto bailout bill are expected to require that the Big Three automakers, as a condition to getting government loans, drop their legal opposition to efforts by California and 15 other states to reduce greenhouse gases, according to an official of the automakers.

It’s part of an article that discusses the battle lines forming over the latest iteration of the Detroit bailout.

Without going into the ecological merits of the California plan, as a purely business matter it is disastrous for the entire auto industry, not just the Detroit contingent. The legislation, aside from probably being a gross violation of the Commerce Clause, is a practical nightmare.

It is virtually impossible to profitably design and sell cars to meet emission criteria that any given state may impose. More to the point, it represents an imposition of the will of the voters of the state of California on the remainder of the country as well as a tax on the workers in the auto producing states.

The requirement that the auto makers drop their opposition is precisely what they don’t need to do. Further complicating the process of reviving these dinosaurs is the last thing needed at this juncture.

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