U.S. Government As Auto Engineers

As GM gets ready to file for bankruptcy next week and the Obama administration gets ready to take a 72.5 percent equity stake in the company, Richard Posner foresees a heavy government hand in the design and production of GM's future fleet. The administration wants an efficient, hybrid fleet--so how could it not influence the actual design of cars? Posner writes:

The government says that it's not going to interfere in management decisions. I don't believe that. Quite apart from the political pressures that the United Auto Workers, and other entities that have a financial stake in General Motors, can be expected to exert on members of Congress and on the President, the Administration seems determined to preserve General Motors in order to (1) affirm the nation's commitment to remaining a major manufacturer of motor vehicles and (2) advance the Administration's goal of reducing oil consumption and (relatedly) carbon emissions. Achieving these goals will require the Administration to intervene, directly or indirectly, in the design and production and even marketing decisions of GM's management.