The US government is protecting its investment in Car companies

This is a big surprise. One would have hoped that the $100 billion already spent would have been enough. Or the $3 billion on the "cash for clunkers" program. Apparently there is more.

A spending bill passed by the U.S. House this summer explicitly forbids federal agencies from purchasing vehicles other than those made by GM, Chrysler and Ford Motor Co. A climate bill passed by the House appears to favor U.S. companies in doling out $2 billion in government funds to develop plug-in electric vehicles. Both measures still would need to be approved by the Senate.

And looming on the horizon is the Obama administration's pending release of new fuel-economy regulations. The rules will provide more details about President Barack Obama's earlier-announced plans to increase the average fuel economy of automobiles sold in the U.S. to 35.5 miles per gallon by 2016. Overseas car makers worry that in the details, the rules will be tilted toward GM, Chrysler and Ford.

The U.S. is majority owner of GM and has a small stake in Chrysler after having pushed both companies through speedy bankruptcy proceedings earlier this year.

"It is a threat," Stefan Jacoby, president of Volkswagen AG's U.S. business, said of the potential conflict of interest posed by the U.S. government's ownership stakes in GM and Chrysler. Mr. Jacoby said his company plans "to watch carefully" whether that "leads to discrimination against manufacturers who aren't getting support from the taxpayers." . . .

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