I was wondering how long it would be before Toyota and the other major automakers started to grumble about the anti-competitive nature of the government auto bailouts. And now we have a fairly targeted and expensive rebate program that favors the government-owned automaker:
“How long does this continue?” Mr. Beatty said. “We can’t set up a situation where the future of the industry depends on constant subsidies…. This suggests that [the government] is prepared to be interventionist beyond their aim to help the industry recover.”
Toyota, known for its hybrid technology, was not informed of the government’s intention to offer the rebates and was taken off guard that the announcement venue was a Chevrolet dealership, Mr. Beatty said.
“The question is: Is this a well-thought-out industry strategy? Or is it sort of the next stage in advancing a particular product and helping a particular company?”
Industry analyst Dennis DesRosiers echoed Mr. Beatty’s concern.
“A cynic would say this is just government subsidizing a product that is produced by a company they own. I think that is a bit too cynical. I just think it is bad policy from a variety of perspectives.”
Here’s an interesting take on the new rebate plan by Victor Wong.
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Update: Today’s National Post editorial has picked up on the anti-competitive theme:
The government can’t very well say it doesn’t want to pick winners in this race while it is riding one of the horses. In taking a chunk of the shares, it has effectively made a moral commitment to distort the marketplace, to reduce the economic efficiency of auto customers’ buying decisions, and to require Toyota to compete in Ontario with one hand tied behind its back.
