Lets have a challenge Free Market vs Government Ownership

Ford would win. The Free Market will always outperform government entities. In the case of manufacturing... the products that people want are the products that they buy. These government made cars will not be what the people want... then there is the stigma that will be associated with a government made vehicle. Reliability and quality will be diminished. The phrase "Good enough for government work" was coined for a reason.

You are really hampering Ford's chances by making them run a profit where the other two do not, and that restriction seems to be opposed to your prior constraint of pouring no more money into GM and Chrysler. If you let the other two operate like money-sink-holes, there is no way Ford would be able to win your competition. If, however, you force the government run companies to operate in a normal business manner (just with an unusual owner), we migh have a race. The Post Office beats the heck out of private shipping entities, so we know the government CAN compete in the free market. The big question seems to be: If Ford were allowed to make cars that did not have to live up to government guidelines, would they choose to do so? According to THEIR propaganda, Ford is committed to surpassing government regulations without being forced to meet guidelines. So this would be a good experiment to see if they are lying about that. The next question is: Would Americans buy cars that were stripped down in that way? If that's all we wanted to find that out, all we have to do is import some of those cheap Eastern European or Indian cars and see how they do. Even in it's simplest form, your question is not about government ownership versus Free Market, but Public Ownership versus Private Ownership in a Free Market system. We certainly could try more companies run by the government forcing private run companies to keep up or perish. That type of competition would have to be more favorable to Free Market purists than government regulations of industry. Ultimately this theoretical battle would probably see Ford losing simply because the government controls too many of the variables. Unless you're also suggesting Ford be allowed to operate with no minimum wage, no safety regulations, no taxes, and no limits on foreign sales.