Government Motors at Work

It's been a busy week for US Transportation Secretary Ray LaHood, who has Toyota in his crosshairs. 

He first told Congress that people should stop driving cars involved in Toyota's ongoing recall.

That panicked Toyota investors, which drove down the stock price.

LaHood's exact quote: "My advice is, if anybody owns one of these vehicles, stop driving it, take it to the Toyota dealer because they believe they have the fix for it."

But LaHood later danced away from that comment, saying he had meant to say that his advice to people driving the vehicles would be "if you are in doubt, take it to the dealership today."

But given the government's large stake in General Motors and Chrysler, some suggest the US is "bullying" Toyota.

(T)his is what happens when a government owns a company - the two companies that are going to gain the most out of this are General Motors and Chrysler," said Peter Morici, a professor at the University of Maryland's business school.

"But their behavior is consistent with the general policy of the US government, whether it's dealing with coffeemakers or cars."

And the UAW, the government's partner in GM and Chrysler, would also love to see Toyota weakened; it has long tried to unionize Toyota's US plants.

The Kansas City Star suggests the government should back off.

To have the U.S. transportation secretary appear to pile on makes it clear that government officials should be a lot more careful with their statements in the future about the U.S. auto industry.

By why expect the government to back off? This is one more thing that happens when the regulators own companies in the industry that they regulate.