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GM CEO: Carbon Regulation "A Huge Help"

12:16 PM, Mar 17, 2009 • By KEVIN VANCE
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As General Motors works to avoid bankruptcy, its CEO seems to be advertising his openness to a suffocating level of government regulation in the private sector.

At a Christian Science Monitor sponsored breakfast with journalists in Washington this morning, GM CEO Rick Wagoner was asked about how government regulation affects the viability of the American automotive industry. Rather than complain about the effect past regulations (CAFE standards, the "two fleet" rule) have had on the industry, Wagoner hinted that government may want to consider designing new negative incentives for consumers to purchase highly fuel-efficient vehicles.

He noted that hybrid sales have fallen off a cliff this year due to the relatively high price of hybrid automobiles and the low price of fuel. "Consumers don't have an incentive themselves" to purchase vehicles that stray from the traditional petroleum model, said Wagoner, and he pointed to Europe as an example of governments creating incentives for consumers. (In Western Europe, government taxes push gas prices past $5 per gallon.)

Wagoner was joined by Larry Schweiger, president of the National Wildlife Federation. Schweiger sang the praises of GM for its fight against global warming. Schweiger is a founding member of the United States Climate Action Partnership, which General Motors (and AIG) joined in the summer of 2007. Schweiger expressed excitement at GM's position on cap and trade or other substantial government programs to tackle climate change. Without affirming or opposing cap and trade, Wagoner said, "Certainty or some clarity of direction is a huge help" for the industry.

Both Democratic Michigan senators oppose cap and trade. As long as Detroit's automakers are coming to Washington hat-in-hand, there's no reason to believe that they'll be in any position to stand up to big government. On the plus side for Detroit's Big Three automakers, increased government regulation of the industry will create an even more imposing barrier for any potential (and viable!) new competition.