Friday, April 30, 2010

Why Did GM's Whitacre Bullshit the Public?

General Motors' claim that it has repaid the government in full has gotten alot of scrutiny from the blogoshere (and the WSJ) and has been uniformly exposed as a lie at worst and a gross distortion at best. Looking at the details, it is clear that it took some chutzpah for Whitacre to make the claims that he did. So why did he do it? Two words...market research. GM is always conducting market research both formally (actual studies) and informally (listening to dealers bitch), and I think they are learning from all quarters that most of the car buying public won't buy cars from them because they are owned by the government. Plain and simple, a spontaneous, unorganized, unofficial Hayekian consumer boycott of Government Motors is in full swing and has been for some time. Whitacre knows this in spades. He probably also knows that a lie can get halfway around the world before the truth can even get out of bed and put its pants on. And what does he care, it is a minor infraction justified by the urgency he feels to turn GM around.

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