Is Buying a Chrysler or GM Vehicle Unpatriotic?

The recent turn of events in our nation's automotive industry has prompted many citizens to rethink what nameplate they'll purchase the next time they're in-market for a new vehicle. Chrysler and General Motors may soon shed what little brand loyalty remained prior to unprecedented government interference.

A Rasmussen Poll, for example, revealed that only 26 percent of respondents supported the federal bailout of GM. The percentage of respondents registering their disapproval is significantly higher, with 53 percent considering it a "bad idea." Of this group, 51 percent answered that they now are "more likely" to purchase a Ford — the lone holdout of domestic automakers clamoring for taxpayer-funded bailout cash; and 30 percent support a boycott of GM products.

Stay Engaged

Receive our weekly emails!

These numbers, of course, are before the dust even settles on what many consider to be the nationalization of two-thirds of the Big Three. Expect the latter numbers to rise significantly when the full scale of this debacle is realized in coming months as automotive purchasers who value the concepts of free markets and limited government draw the conclusion that subsidizing car companies with both tax dollars and discretionary funding runs contrary to principles espoused in the U.S. Constitution. Will these automakers have to worry about customers who believe it's their patriotic duty to avoid their products?

In mind-numbingly swift fashion GM has been parceled out in percentages - with the federal government owning 51 percent of the company and the United Auto Workers union claiming 38 percent. Private investors wound up owning the remaining 11 percent.

President Barack Obama has assured the American people that the government has no interest in running GM, yet the administration forced out CEO Rick Wagoner, a decision that rightfully belonged to the company's shareholders. The administration is also directing the company to build "green vehicles" irrespective of market demand. Considering the government's inability to run itself efficiently, such dictates are unlikely to restore profitability anytime soon. Likewise, it is hard to believe that the UAW will be satisfied with being silent partners when union jobs are at stake.

In the meantime, bankruptcy Judge Arthur Gonzales allowed Chrysler to sell most of its assets to a new company held by Italy's Fiat, as well as a UAW insurance trust and the U.S. and Canadian governments. According to bankruptcy filings, it now appears that more than $7 billion of government bailout money will not be repaid by Chrysler. In other words, taxpayer money is being used to transfer a private company to a foreign automaker (which has not put any cash into the deal), the UAW and the U.S. and Canadian governments.

Left out in the cold by the Chrysler bankruptcy are investors, especially those "evil" hedge funds that did not accept TARP money and refused to participate in the Chrysler bailout. The UAW is scheduled to receive a 55 percent stake in the new company — presumably a much better deal than investors who apparently will only receive pennies on the dollar.

This new Chrysler will need investment dollars, and one has to wonder where those dollars will come from. It seems doubtful that private investors will have much interest in getting burned again while the government is making political decisions regarding restructuring the company.

It looks like the American taxpayer will remain on the hook for more bailout dollars to salvage GM and Chrysler. There are different definitions of a patriot. Is buying American patriotic? For most, a patriot is one who defends the Constitution and the principles articulated by our Founders. Both have been completely ignored by the de facto government takeovers of Chrysler and GM.

As for America's third domestic automaker, it appears Ford does "Have a Better Idea" by not taking taxpayer money (not withstanding Ford accepting government loans for electric vehicle technology). Let's hope the company can stay the course so that America has at least one private automaker left.

The rule of law is a fundamental principle to the preservation of a free people and a civil society. World history is replete with tyrants who have proclaimed that the ends are justified by the means. The federal government's boardroom coups at Chrysler and GM using taxpayer dollars are no different. American consumers would do well to vote their values the next time they purchase a new vehicle.


Russ Harding is senior environmental analyst and Bruce Edward Walker is communications manager of the Property Rights Network at the Mackinac Center for Public Policy, a research and educational institute headquartered in Midland, Mich. Permission to reprint in whole or in part is hereby granted, provided that the authors and the Center are properly cited.

Post a public comment on this.
View all comments on Mackinac Center articles.