It could and probably still will happen, but it's amazing to me that so far no flag-waving senator or representative seems to have jumped on something a General Motors executive said yesterday: that Japanese brands are benefiting the most with regard to "Cash for Clunkers."
Mike DiGiovanni, GM executive director of global and market industry analysis, said matter-of-factly in a GM conference call for auto industry analysts and reporters that logically, Japanese brands would get the most business from "Cash for Clunkers," formally called the Car Allowance Rebate System. That's because on average, Japanese brands have the most fuel-efficient fleets. DiGiovanni pointed out that GM is also working on improving its fuel economy, and expects to start catching up in the near future.
"Whatever they (consumers) were trading in, they had to buy a fuel efficient vehicle, and at the moment, they (Japanese brands) have the most fuel-efficient lineups. We won't be disadvantaged in the future ... but frankly, the Japanese are benefiting the most now," he said.
DiGiovanni didn't seem to be complaining, just stating a fact. It could even be described as stating the obvious. But in the politically charged atmosphere surrounding the recent government bailout and bankruptcy restructuring for Chrysler and GM, plus the ongoing controversy over "Cash for Clunkers," it could be political dynamite.
After all, the U.S. government is now the majority shareholder in GM and a major shareholder in Chrysler. In a narrow sense, the same government is putting money into a program that's helping the competition.
For now, everybody in the auto industry, at least, seems to like Cash for Clunkers. In separate conference calls and written statements, several car companies, foreign and domestic, praised the program and said it contributed to the highest sales rate so far this year.
"I challenge anybody to show me one-week program for $1billion that has had as much benefit for consumers, and as much benefit to the economy," said George Pipas, U.S. sales analysis manager for Ford.
Bob Carter, group vice president and general manager, Toyota Division, also praised the program. "The industry greatly benefited from the CARS program this month," he said. "CARS is clearly a success in terms of getting inefficient vehicles off the road."
The automakers are hoping the U.S. Senate will approve action already taken in the U.S. House to give the Clunkers program an additional $2 billion, to keep it running.
Maybe Cash for Clunkers is getting too popular to kill. And maybe U.S. politicians have learned that knee-jerk Japan-bashing isn't so simple any more. The global auto industry is much more inter-connected than it was in the Japan-bashing 1980s, and foreign manufacturers, including the Japanese, the Germans and the South Koreans, have more factories than ever in North America.
However, Cash for Clunkers could be in for a rough political debate, even if ultimately it gets extended.