Competition in the form of rivalry, sometimes of the cuthroat variety, is supposed to ultimately benefit consumers because it prevents any one company from gaining a position so dominant that they can then gouge consumers. So ingrained is this belief in the merits of competition that the government acts to keep competition at a healthy level in domestic industries. One such way is to prevent collusion among competitors in the area of price. All of this leads me to question whether Mr. Okuda is telling us the unvarnished truth. Reutman astutely observes that what Toyota executives fear is how the US government might react of GM fails, i.e. that they may retaliate against foreign car companies:

On Tuesday, General Motors announced it would cut 25,000 jobs and close assembly and parts plants by late 2008. Slammed by rising health care costs and sliding sales, GM's chief exec, Rick Wagoner, also said he will slash annual North American production to 5 million vehicles by the end of this year. GM made 6 million vehicles in 2002. Asked Wednesday about GM's shocking announcement, Toyota's Okuda replied, "If you think about GM's current output volume and vehicle lineup, laying off 25,000 to 30,000 employees is inevitable."

"We need to give some time for American companies to take a breath," Okuda said. He is most worried about a protectionist backlash, should Ford and GM slide further. If you recall, Toyota and other Japanese carmakers were the targets of union outrage in the 1980s, when they were accused of stealing jobs from American workers.

"Many people say the car industry wouldn't revisit the kind of trade friction we saw in the past because Japanese automakers are increasing local production in the U.S., but I don't think it's that simple," Okuda said. "GM and Ford are symbols of U.S. industry, and if they were to crumble, it could fan nationalistic sentiment. I always have a fear that, in turn, could manifest itself in policy decisions."

Now this makes sense to me. I don't agree with his reading of the likely reaction of the US government, but I can understand why he takes it as a realistic possibility. Still, I am left to wonder whether such an obviously transparent strategy of propping up a competitor can be seen as collusion, something highly illegal and very short of altruism, something that violates the spirit, if not the letter, of anti-trust law, something whose espoused motives we are correct to distrust.