Rick Wagoner's in-your-face defense of his company's heavy use of incentives last week marked a stunning shift for an industry that has often apologized for its givebacks.
We're not ashamed, GM's chief told a conference in San Francisco, on the eve of the National Automobile Dealers Association convention. Our strategy is working for us. "Stop whining." Get used to it.
Adam Smith would have smiled.
After a decades-long slide in U.S. market share, GM has found a formula that works. As Wagoner pointed out, reducing prices makes GM more competitive, keeps its workers working and provides decent profits. Along the way, GM's dealers made more money last year than ever before, too.
If all that causes the competition to squirm, so be it. Bill Ford, whose company has been forced to me-too GM's incentive steps, had his own moment of confession in San Francisco when he said that incentives are here to stay.
This is an incredibly rich market. And it's rich not just because so many of the world's automakers are duking it out here. At one extreme, you have GM - with all its size - leading the pricing wars while it mends its product line. At another, you have the likes of Honda and BMW dishing up vehicles that consumers are willing to pay a lot closer to sticker for.
And everywhere you have companies trying to improve. GM can do what it's doing today because it has clawed its way into becoming the Big 3's low-cost producer. That will always be an advantage.
Being the biggest provider of incentives is not the optimum long-term strategy. The products that GM, Ford and others displayed at the Detroit auto show last month are all about striving for that BMW and Honda status.
Adam Smith knew that capitalism could be messy. The U.S. auto market is a chaotic place right now. But that frenzy also is forcing every player to excel - and rewarding consumers in a big way.