Two days ago, U.S. Secretary of Transportation Ray LaHood made a startling and ridiculous statement when asked what Toyota vehicle owners should do about Toyota’s sticking pedal recall:

“stop driving it. Take it to a Toyota dealer because they believe they have a fix for it.”

A few hours after making this statement, LaHood was quick to retract saying “What I said in there was obviously a misstatement. What I meant to say or what I thought to say was if you own one of these cars or if you’re in doubt, take it to the dealer and they’re going to fix it.” Unfortunately, much of the damage from LaHood’s statement had already been done by the time he took it back. The Wall Street Journal reports that Toyota’s stock price fell 5.2% as a direct result of LaHood’s “stop driving” comment. In real money, that’s about $4 billion dollars in market value lost in the span of a few hours…

But LaHood’s comments didn’t just hurt Toyota’s stock price – what rational person wouldn’t be a little concerned after hearing that the government said “stop driving” Toyotas and then quickly retracted? Whatever side of the fence you’re on, we should expect more from the person in charge of NHTSA.

Ray LaHood Taints Public Perception of NHTSA

Ray LaHood's comments have tainted the public's perception of NHTSA

The question is, how can we rely upon government officials to be objective about vehicle safety when our government owns a substantial percentage of two major automakers?

Don’t get me wrong – Toyota is NOT an innocent victim here. Perhaps if Toyota’s management team wasn’t so inept and arrogant, they would have taken this issue more seriously when it was raised months ago. Perhaps Toyota wouldn’t be in the boat they’re in today if they hadn’t tried to grow so big so quickly.

Also, for the record, I do not believe that NHTSA is biased against Toyota. While it’s certainly possible LaHood’s comments were a calculated, sinister move to undermine Toyota, there’s a difference between a cheap shot delivered by a politician and a NHTSA conspiracy to undermine Toyota’s safety record. Toyota created this problem – NHTSA didn’t conspire to invent or promote it.

Still, despite Toyota’s mistake and LaHood’s gaff, the American people are left with a problem: How can we trust our government to ensure our safety when it owns a stake in two major auto manufacturers?

Some might say this concern is an over-reaction. If that’s true, why was the White House so quick to clarify LaHood’s comments stating:

The administration’s involvement with GM, “of course, would not have any impact on this administration’s commitment to making sure that Americans are kept safe on our roads,”

Also consider LaHood’s comments about GM and Chrysler at the Detroit Auto Show a few weeks ago:

Mr. LaHood…described the Chevrolet Volt plug-in hybrid as the kind of green car Americans are looking for. In response to a question about Chrysler’s future, Mr. LaHood described that automaker as being “on the cutting edge of developing products that people will want.”

“As innovative and creative as I’ve ever seen” was Mr. LaHood’s summary of Chrysler’s condition.

LaHood made more comments at the Detroit show – Automobile magazine and Automotive News report:

Having bailed out Chrysler and General Motors last year following the companies’ bankruptcy, the government has a vested interest in the Detroit automakers. The Obama administration expressed its “commitment and leadership to get the industry moving again for jobs.”

Are LaHood’s comments an attempt to get GM and Chrysler “moving again for jobs?” Perhaps. Or perhaps they’re just foolish comments from a harried and over-worked public figure.

Whatever LaHood meant to say really isn’t important any more. The fact is, LaHood has tarnished the reputation of NHTSA and highlighted a major conflict of interest: As long as the US government owns a stake in major auto manufacturers, the public will forever question the motives of government officials.

Special thanks to the Cato Institute for inspiring this post.

What do yo think – should we trust NHTSA to be objective as long as the government owns a portion GM and Chrysler?

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