Competition matters

...and just because something is private sector doesn't mean it has competition. Megan McArdle's history of the big three:

In the early 1950s, for various reasons Detroit developed a cozy three-way oligopoly. The UAW developed a cozy monopoly on supplying labor service to that oligopoly. In some ways, the UAW helped sustain that oligopoly. If you're a big company whose quality suffers, you have problems. But if you have a union making sure that labor quality cannot vary across the industry, you don't need to worry that your competitors will make a better car. Detroit competed on styling and power, not reliability or price.

During those years of oligopoly, the Big Three's first loyalty (after their loyalty to management) was loyalty to the union. The worst thing that could happen to a Big Three manager was a strike. Making a car that is reliable is only partly a matter of engineering; it's mostly a matter of extremely tight control over the assembly process. That tight control is necessarily less pleasing to the workers than looser rules. The unions could severely hurt a company with a strike. Whereas the customers? The customers could only go to another company where the same union was negotiating the same loose work rules.

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And just because something

And just because something is registered as a private company doesn't mean it's private sector. In the late 40's, Detroit was already tied closely to the federal state, keeping competition in check.
Coppola made a movie on would be competitor, Tucker.
http://en.wikipedia.org/wiki/Tucker:_The_Man_and_His_Dream
http://www.imdb.com/title/tt0096316/