Market perversions: Chrysler retreats
Canadian taxpayers have been spared the financial pain of another government giveaway to an automaker — but not because their public officials have suddenly seen the light and renounced such marketplace perversions.
Five years ago, the governments of Canada and Ontario bailed out Chrysler Canada with a $2.9 billion (Canadian) loan. Canada's conservative Fraser Institute estimates taxpayers will never recover $810 million of that. Yet Fiat Chrysler CEO Sergio Marchionne lately had threatened to end vehicle production in Canada unless more corporate wealthfare was forthcoming.
Both Canada's government, controlled by the Conservative Party, and Ontario's government, controlled by the Liberal Party, were willing to entertain Mr. Marchionne's demands, which he hadn't made public. But resulting controversy — including the head of Ontario's right-leaning Progressive Conservative Party decrying “corporate welfare handouts” — apparently made pursuing more government help more trouble than it was worth for the automaker.
Calling the issue a “political football,” it dropped its demands Tuesday last. Marchionne said Chrysler Canada would be less beholden to government, according to The Wall Street Journal.
Alas, this outcome will remain the exception, not the rule, until governments stop such market-distorting interventions that reward corporate arrogance, turn taxpayers into unwilling venture capitalists and invite further demands.