It’s often forgotten that the U.S. auto industry includes foreign subsidiaries such as Toyota (market cap of $93 billion) and Honda ($73 billion). Put together, these two companies are sixteen times as big as General Motors and Ford. Toyota and Honda tend to locate plants in right to work states (where workers don’t have to join a union as a condition of employment). They have successfully fought off unionization attempts by the UAW. As a result, they don’t have the crippling legacy pension costs and bizarre health care slush funds that the UAW has persuaded GM and Ford to adopt. And they’re eating the Big Three’s lunch. For the latest reporting period, Toyota and Honda had a combined net income of $18.5 billion. GM and Ford? They lost over $34 billion.
After the actual or de facto socialization of the Big Three Three, Toyota and Honda will still do their best to avoid the marauding horde that is the UAW. They will still dutifully pay their U.S. corporate income taxes (a country which has the second-highest rate in the world, incidentally, besides, of all places, Japan). They will also continue to dominate the auto industry—indeed, they will be the auto industry. GM-Ford will pretend to be car manufacturers, but it will be a sad farce. If not allowed to die, GM and Ford will simply be nationalized, and become zombies propped up by the unwilling grace of taxpayers.