Good news, American auto owners! If you’ve been eyeballing a Lexus or a CRV because you want to own a car whose maker will be around long enough to honor the warranty, take another look at Detroit. Instead of handling their own warranties, Uncle Barack and his dog Spot will handle your warranty — along with a hefty new bureaucracy:
Obama will make two other announcements Monday.
One, the president will announce a new government-backed warranty program for all new GM and Chrysler vehicles purchased during this restructuring period. A fund will be set up equal to 125 percent of the total cost to pay for warranty service. The auto makers will contribute 15 percent while the government will provide 110 percent, with the money coming from the economic stabilization funds, the gift that keeps on giving. A separate company will hold the funds and pay the claims even if one of the auto manufacturers goes into bankruptcy or out of business.
The president will also name a Director of Recovery for Auto Workers and Communities. Edward Montgomery, labor economist and former Deputy Secretary of Labor, will serve in the role, helping autoworkers, communities, and regions adversely impacted by the failure of the automakers find new jobs, businesses, and industries.
This is great news — for fans of the DMV. Vehicle owners can expect the same kind of efficiency and expertise they receive there in handling warranty issues with their vehicles. Instead of working with dealers on the warranties, the government will now have to get involved, which will mean extensive paperwork for every warranty claim as the Directorate of Auto Warranties will have to account for every single penny, or at least those pennies that don’t get earmarked for Auto Warranty Bike Paths by Rep. Jim Oberstar.
And let’s not forget what this will do for Detroit’s competitiveness. Now that warranties will get funded by Uncle Sam, what do you suppose will happen to them? They’ll get shortened, and if they become uncompetitive, it will literally take an act of Congress to get longer warranties offered by Detroit. But that’s not what will really happen. If the Directorate of Auto Warranties discovers that the competition offers longer and more robust warranties, the Directorate will simply get Congress to pass laws outlawing them. After all, we can’t have a bunch of furriners undercutting Uncle Sam, can we? Why, that would be downright unpatriotic!
Government does not belong in the business of offering auto warranties. Two years ago, that would have been so obvious as to elicit derisive laughter for even mentioning it. But when we get a bunch of used-car salesmen in the White House and Congress, this is the result.