Comparing GM against Toyota

Bailing out the Big 3 is a bad idea all around (as was the financial industry bailout--two wrongs will not make a right here). Here's a perfect example of why (from WSJ article):

But the $15 billion auto rescue plan failed in the Senate last week. As Minority Leader Mitch McConnell said, the American taxpayer should not be asked "to subsidize failure." The failure can be seen in the comparative financial data: both Toyota and GM, for example, made about 9.4 million vehicles last year. But as Investors Business Daily notes, Toyota made a profit of $1,874 per car, while GM lost $4,055 per car, or $38.7 billion, and almost all of those loses were due to its U.S. operations.

Consider also that GM lost billions in a failed partnership with Fiat, and ultimately paid Fiat $2B just to get out of the deal. GM also posted total net loss of $1.419B in 2004 and $2.697B in 2005, years in which the economy was not collapsing! According the the GM's annual report "The 2005 total net loss is primarily due to the impact of Delphi benefit guarantee charges offset by favorable income tax items." In other words, they lost billions of dollars on their Delphi parts manufacturing subsidiary as they had to rework the UAW's benefits package. Oh, and that seems related to the fact that Delphi was in Chapter 11 bankruptcy!