Tag Archives: government ownership

When you competitor is your regulator

Imagine owning a grocery store, and your competitor determines what products you can sell.  Or that you’re a banker, and the owner of a competing bank tells you what hours you stay open.  Or  that you own an automobile dealership, and your competitor requires a certain brand of tires be on all the vehicles you sell.  Sounds far-fetched, doesn’t it?  And of course, it is.

Nevertheless, Toyota’s issues, which are huge, are PERCEIVED in some corners as being inflated because the government has an ownership interest in a competing auto manufacturer.  This is just one problem caused by the government getting in the business of owning companies that compete in the marketplace.  Especially when the government is an owner of U.S. company and the competitor is a foreign company.  Thrown in a comment by a representative of the competitor/regulator that your vehicles should not even be used (“Stop driving…”) (later retracted) and questions start being asked.   The first one is obvious: “Is this a conflict of interest?”

Tomorrow, February 23, the CEO of Toyota is scheduled to appear before a congressional committee.  It will not be pretty.  Neither will the aftermath, because one of the questions that will be raised is whether the government/competitor is singling out a competitor.  I’m not defending Toyota here, nor am I accusing the government.  Just pointing out that one of the dangers of government ownership of private business is fairness with competitors.