Ford won't be able to compete because GM will be receiving tons of money from the Federal government.
The government may be able to keep one company from sinking, but it's not a zero-sum game. Even in the "OMG TEH COMMEES!" distortion, propping up GM doesn't lead to the downfall of Ford. There's a leap being made to further distort the real goal of the automotive bailout -- keeping manufacturing jobs in the United States.
The
laissez-faire approach, by the way, can't accomplish this one, as the jobs are primed to migrate to Japan, Europe, and increasingly India, just as soon as they're lost in the United States. I don't care for how the companies have managed themselves over the past few years, building their businesses with legendary shortsightedness, but I've no malice toward the workers, who would be thrust into the overcrowded, understocked job market, should the US auto industry be allowed to sink.
With a crisp, new university degree, it took me six months to find a job, and the one I did find wasn't in either of my fields of study. How long do you suppose someone with a limited post-secondary education and highly specialized skill set would have to hunt for a job, in a country with no jobs that match his/her skill set? How long do you suppose it would take, if that worker was joined by several hundred-thousand people of similar education and identical skill? Neither the big nor small pictures are particularly pretty.
The auto bailout is like chemotherapy. The medicine is bad, but the consequence of foregoing treatment is much, much worse.