It was not too long ago that the halls of the Capitol were reverberating with diatribes against Toyota and campaigns against their supposed malfeasance to consumers were being mounted right and left.  Indeed, Congress leaped at the chance to crucify the automaker, though nothing suggested there was anything unique about the Toyota recall. In fact, Honda had announced a recall of almost the same size the month prior to Toyota’s first Congressional hearing, but was not met with any bureaucratic hostility.

This, as we discussed in the spring, was due to the government’s stake in seeing Toyota fail. The most profitable car company in America, Toyota consistently outperformed government-owned GM by a four-to-one ratio. This is due to the supremely unmanageable mandates of the United Auto Workers (UAW) which greatly inflate the cost of producing cars by requiring bloated salary and benefits for workers. Toyota’s business model, while vehemently anti-union, also focuses on maximizing production and utilizes all of its workers towards that end. Rather than address its inefficiencies and bankruptcy brought on by heavy unionization, the government saw the Toyota recall as a golden opportunity to bring down its main competitor.

Members are silent this week, however, as new evidence has surfaced that overenthusiastic drivers, and not defective parts, caused the now-infamous “sudden acceleration” that was to blame for the recall. No doubt government officials had been hoping to repeat the Audi experience of the 1980s, where that carmaker was almost forced out of business due to the same allegation that their cars would accelerate, unprovoked. The culprit in the 80s? Driver error again. Members, mostly those representing auto union-heavy districts, failed to recall this lesson.

These findings by the National Highway Traffic Safety Administration demonstrate that the hysteria surrounding the Toyota recall was a politically-motivated assault meant to damage the car company’s brand. This witch hunt proves government has no business in business – the auto bailout was poorly-conceived policy on its own merit, and as a catalyst for industry usurpation it makes even less sense.

photo credit: pobrecito33

Posted by Mattie Duppler on Friday, July 16, 2010 9:47 AM EDT

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