Is GM Owner Federal Government Playing Politics with Toyota Recall?

The government’s traditionally enforced safety standards on automobiles sold in the United States. But the government didn’t always own a car company. So you’d expect the media to take a hard look when the government’s roles as regulator and competitor converge.

But unless you saw the Jan. 28 broadcast of CNBC’s “Power Lunch,” you might not realize that this is exactly what has happened. In an interview with CNBC “Power Lunch” co-host Michelle Caruso-Cabrera, Sen. Jeff Sessions, R-Ala., was asked about the Toyota recall, which involves 2.3 million vehicles since a Toyota manufacturing facility had recently located in Alabama.

“We’ve got a fabulous Toyota engine plant in Alabama,” Sessions replied. “They’ve been doing very well. It seems that they’ve recognized they’re going to fix this problem and it’s going to take some effort.”

However, as Caruso-Cabrera pointed out, it was the Obama administration’s Secretary of Transportation Ray LaHood who determined that Toyota had to recall these vehicles over reports of sticky acceleration pedals.

“Ray LaHood is on the record saying that he told them they had to do this,” Caruso-Cabrera said. “They had to stop selling. Are you looking into whether or not that was absolutely necessary? Are you convinced this was necessary?”

Sessions expressed his concern over that possibility and noted the amount of money the federal government had recently pumped into GMAC, the auto financing arm of General Motors.

“Well, you know – we were in until late last night and I hadn’t heard that,” Sessions said. “I worry about those kind of things. I worry about Ford working hard and having to compete against the federal government. With an unlimited – they just gave $3 billion more to GMAC. The President’s got to be careful here. He can not be playing politics and union politics or regional politics with the economy of this country.”

Since Toyota (NYSE:TM) announced the recall, the shares of the auto manufacturer have dropped more than 15 percent in the last seven trading sessions, down $2.10 on Jan. 28 after a $7.01 slide the day before.

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