Holman Jenkins On Chrysler/Fiat

Holman Jenkins, Jr., wrote another piece in his Wall Street Journal column on Wednesday of this week that is scathing in its assessment of the current US administration's approach to the two US-based auto makers which are in or near bankruptcy. Continuing his outright mockery of the president, Jenkins pokes fun at the tangled, mixed-up, illogical positions in which the current administration, and Congress, now find themselves.

For example, he begins with,

"When you buy a car, I hope it will be a Democratic car."

Oops. We have misquoted the president. He said last week he hoped you would buy an "American car" -- though apparently not one built in a red state in a plant owned by Japanese or German investors. He meant a car built by a company headquartered in Detroit, even if the car itself is assembled in Mexico or Canada. How confusing.

Hundreds of shoppers certainly understood him to mean a Chrysler car. They rushed into dealerships last weekend. Never mind that Chrysler isn't technically making cars in the U.S. at the moment -- it shut down its factories -- and when it reopens it will be on a path to ownership by a company based in Turin, Italy."

It is pretty riotous to hear the president fumble with his call to 'buy American,' when that really means cars assembled outside the US, by a firm which will now be owned by foreigners. Does he ever mention that American workers in South Carolina and nearby states assembling cars for Mercedes, Toyota, et.al.?

Jenkins then observes how astute the Germans at Daimler were to quickly dump Chrysler a few years ago.

"Daimler, its previous parent, certainly had no desire to fund such profitless extravagance. The Germans took a lot of guff but they're the ones laughing now. They sold their majority stake in Chrysler just months after Democrats took over Congress, and just weeks after President Bush began blathering about "oil addiction" and echoing Democratic demands for stringent new fuel-mileage rules (after opposing them for years).

It's no exaggeration to say the rest of the story is told in Chrysler's bankruptcy filing. In search of a partner to underwrite development of fuel-sipping hybrids and electric cars that would be almost certain to lose money in the U.S. marketplace, Chrysler's Tom LaSorda spent two years seeking alliances with Nissan, GM, Volkswagen, Tata, Magna, GAZ, Hyundai, Honda, Toyota, Beijing Auto and others -- efforts that were "uniformly without success." Fiat, he said in an affidavit, was "Chrysler's last best hope."

A stunning rebuke to this whole notion that anyone with brains and money believed that Chyrsler can return to profitability by building cars that the green crowd in America demand. Jenkins then mentions the ill-famed car of the editorial's title,

"Not since Renault teamed up with AMC to bring you Le Car has an odder pairing been seen -- or a less promising one.

Unless gasoline prices go to $5 a gallon, Mr. Marchionne certainly is not so foolish to believe making and selling teensy eurocars in the U.S. is anybody's route to salvation.
Even in Europe, he has noted, a move to bigger, more powerful cars is underway. Motorists are getting fatter and older -- and unwilling to contort themselves to get in and out of a car.

He also understands that trying to beat Toyota at its own game is a nonstarter. Toyota sets a standard of quality and technology that all must meet -- that's the price of admission. But "what we have that Toyota does not have -- and I say this with all modesty -- is the great historical heritage of the brands." "

This is pretty funny. A collection of largely has-been brands, with the possible exception of Jeep, which, of course, has bloated into a non-eco-friendly car line. And this is what taxpayer money is funding to take on the world's best auto manufacturer?

Then Mr. Jenkins notes how the head of Fiat is aiming to build a car maker with sufficient scale to survive the coming thinning of the vehicle-manufacturing herd,

"He's already turned his attention to Opel, GM's European arm, which is on the market. Notice, though, that he's committed no money to Chrysler, only a promise of vehicle technology. As a New York Times story recently trailed off, ". . . at some point, some [Obama auto] task force members acknowledge, the drive for profitability is likely to collide with Mr. Obama's fuel-efficiency and low-emission goals."

Yup. Mr. Marchionne has kept his skin out of the game for a reason. Don't expect him to reach for Fiat's modest checkbook until Team Obama can explain exactly how Chrysler is supposed to make money building the "green cars" Mr. Obama wants it to build. But you already know the answer: You, the taxpayer, have not finished chipping in to keep Fiat-Chrysler alive."

As usual, Jenkins pulls no punches. He correctly concludes that you, the US taxpayer, will now continue to fund this Don Quixote-like dream of profitably building green cars in America. From a failed manufacturer.

Everyone in power over the past few years in Washington is guilty on this one. And, as Jenkins sadly notes, we're nowhere near finished with this travesty yet.