Fiat’s New Year’s Day buyout of the UAW’s Chrysler stake completes the Italian company’s purchase of the Detroit automaker — and puts to rest one of the ugliest chapters of the auto bailout. The Obama administration’s thuggish, extralegal favoritism towards Big Union allies — at the expense of secured bondholders and the pensions of thousands of teachers and firefighters — was an early indication of how this president has routinely conducted business (and an indication, too, of the media’s willingness to cover for it).
But Fiat-owned Chrysler is also a reminder that health care isn’t the only industry the White House intends to transform. Big Government is making mischief with autos.
The Fiat buyout was in part necessary because the administration used the cover of the bailout (when they had big loans out to GM and Chrysler) to impose onerous, 54.5 mpg mandate on all U.S cars and trucks. Perversely, this hits small companies like Chrysler particularly hard because it doesn’t have the capital to invest billions in R&D projects to develop electric cars and other technologies necessary to meet the mandates.
President Obama likes to claim he’s the defender of the little guy, but his auto policies tilt the playing field to ever larger auto conglomerates which can both afford the R&D to meet government edicts and lobbyists to influence the regulations.
Since exiting bankruptcy in 2009, Chrysler has returned to profitability based on strong truck sales in its Jeep and RAM brands. So shouldn’t the feds be nursing those strengths? Alas, green ideology trumps business sense. Over the next decade, the automaker will have to spend heavily to meet 54.5 mpg federal rules and California’s demand that 15 percent of all sales be electric. Which is why you are already seeing government-forced vehicles like the Fiat 500e (sold only in California) and nine-speed transmissions in Jeeps. Even Corvette has been forced into the act with a seven-speed manual transmission.
Who needs a seventh overdrive gear on top of the sixth overdrive on a ’Vette? The EPA.