GM = Government Motors?

Someone hypothesized that with the U.S. government as the majority shareholder in General Motors, it is inevitable all federal vehicle purchases will be made from the same. I disagree with this notion, for a variety of reasons.

First, federal procurement regulations would have to be changed by an act of Congress, something that no politician would do at this time, given the public condemnation of bail-out funds. The regulations require that a Request For Proposal be drawn up delineating relevant requirements, and the lowest-cost bidder who meets the specifications will win the contract. Sure, there are those who would point to Halliburton's no-bid contracts in Iraq, but those RFPs were structured in such a way and with sufficient specificity that Halliburton was the only viable company that could meet the specs. I doubt that a request for a vehicle could be tailored such that GM is the only vendor with a product that passes the bar. They have competition in every segment; and those competitors have lobbyists too.

Second, President Obama himself has stated publicly that GM will have to survive through product development, pricing, and promotion. A sweet-heart deal with the government would only serve to hinder their progress toward building desirable automobiles. It's a well known fact that when presented with a captive market, there is no incentive to improve quality in all its facets (fitness for use, quality of conformance, and specifications). Competition has marked the forward progress of product design since the square wheel and competition will save GM.

Besides, everyone is already dealing with the firestorm of health care reform and I doubt that any public official is ready to launch another stimulus plan, covert or otherwise, to the automotive industry.