Government Control of a Major Corporation? It's Not So Unheard-Of Outside the U.S.

A long-running U.S. political controversy centers on how much control government should have over commerce. Health care, utilities, and airlines are just a few of the industries receiving scrutiny over this issue.

The auto industry - along with banking - is racing ahead of them in the recent iteration of the debate brought on by all the government bailouts. One plan for saving troubled General Motors calls for the government owning 70% of the company. The New York Times has already joked that GM may soon mean Government Motors.

If the deal goes through, GM won’t be the first massive company to be run by a government. This week Hoover’s Editors look at some companies that take orders not from shareholders but from the officials of a national government.  Perhaps Government -- uh, excuse us, General -- Motors could learn some lessons from them.

1. Petroleos Mexicanos

Pemex is owned by the Mexican government and accounts for about one-third of the administration’s revenue. Pemex traces its origins to oil discoveries made by American and British developers. After president Porfirio Diaz (who allowed foreign ownership of oil resources) was deposed in the Mexican Revolution, the country became the first non-communist state to nationalize oil holdings and later created Pemex.

2. Air India Limited

The Indian government doesn't just regulate the airline industry -- it outright owns the nation’s flagship airline. The Indian government hasn’t done a bad job of managing that company either. A feather in its cap, Air India is in line to join the Star Alliance global airline marketing and code-sharing group, led by industry heavyweights Lufthansa and United Airlines.

3. British Broadcasting Corporation

The BBC, the UK's dominant broadcaster, is directed by a 12-member board appointed by Queen Elizabeth II. Whether they watch the Beeb or not, British TV-set owners support it with a tax that provides the corporation with 80 percent of its revenue. Americans desiring to see British government pounds at work can watch BBC America.

4. Caisse des Depots et Consignations

The investment bank for the French government, Caisse des Depots et Consignations (CDC), was formed in 1816 under the government of King Louis XVIII. Besides its obvious government-related services such as retirement plans for government employees, CDC also owns a stake in French construction company EIFFAGE and tourism company Club Med. The next time you’re vacationing on the beach you may be seeing French government francs at work.

5. Dongfeng Motor, China FAW Group, and Shanghai Automotive

It's no surprise to learn that a business enterprise in China is under some government control, but it might be instructive in light of GM’s future to especially mention three government controlled companies: Dongfeng Motor, China FAW Group, and Shanghai Automotive. These companies account for the lion’s share of the auto market in China, which is expected to surpass Japan as the world’s largest car producer in 2009.

6. Government Pharmaceutical Organization

Will healthcare in the US ever reach the point it has in Thailand, where the Government Pharmaceutical Organization operates a dozen facilities, including six retail drug stores, with a staff of more than 200 pharmacists? Not only does this government entity supply drugs to Thai citizens, but it also researches and manufactures pharmaceutical products.

7. NV Nederlandse Spoorwegen  

As expected, Dutch passenger train company NV Nederlandse Spoorwegen takes care of the travel needs for those going Dutch. The Dutch-government controlled company is thinking outside the dikes and expanding across the channel into the UK. In 2004 the company was granted the concession to operate rail service in northern England.

8. JSC Russian Railways

Though the communist system of the Soviet Union collapsed in the early 1990s and the newly formed Russia embraced capitalism, some government ownership of enterprises still remains. Government-owned JSC Russian Railways is the nation’s fourth largest company by revenue. It handles 80 percent of all freight brought to Russia and runs trains outside of Russia as far away as Beijing. Lenin would have been proud.

9. Sveaskog Forvaltnings

Entirely owned by the Swedish government, Sveaskog Forvaltnings is Sweden’s largest landowner. Besides performing such government chores as selling hunting and fishing licenses, Sveaskog also sells timber from its forests and conducts nature conservation research.

10. Taiwan Tobacco & Liquor Corporation

Maybe the government in your city won't let you smoke a cigarette at your favorite bar or buy some beer at 11 am on a Sunday ahead of that afternoon barbecue. One government-owned company, though, actually sells alcoholic beverages and cigarettes. The Taiwan Tobacco & Liquor Corporation (TTL) was once the only company that could make authentic Taiwanese beer. Taiwan’s entrance into the World Trade Organization ended that monopoly. Besides Taiwan Beer, TTL's products include such brands as Shaohshing wine and the ironically named Long Life cigarettes.