THE KEY ELEMENTS in the Polish government's 'shock therapy' economic transformation programme of 19901 that were specifically targeted for industrial restructuring of state-owned enterprises (SOEs) were trade liberalisation-to increase competition, and rapid privatisation--to provide more effective corporate governance of SOEs as a precondition for efficient restructuring. In conjunction, subsidies were to be withdrawn, whilst incentives were provided to stimulate foreign investment-particularly direct investment (FDI), which it was hoped would be substantial and considerably aid the restructuring and modernisation process. In sum, this represented a 'hands off' approach, where the government consciously eschewed a clearly defined policy/ strategy for industrial restructuring. The principle became known as: 'the best industrial policy is no industrial policy' (WERI, 1993, p. 175). Thus, generally, and especially concerning the motor sector, market forces were initially the sole instrument for restructuring. However, the severe recession that ensued after liberalisation dictated the need for some intervention. Thus, with respect to the motor industry, all the original equipment manufacturers (OEMs)2 began to experience severe difficulties under the new economic regime. Simply letting these loss-making, insolvent enterprises collapse (in the hope that their assets-which in any case are highly specific-will be taken over by other, healthier enterprises or, preferably, multinationals) proved to be misconceived and, politically at least, too costly an option. For doing so would have resulted in practically the whole domestic industry collapsing. There then followed various government interventions to support SOEs (Husan, 1994, pp. 310-312), contrary to the spirit of the reform programme. Though reluctant and half-hearted, they did indicate that the government had inadvertently come to adopt what may be described as a 'quasi-industrial policy'-although it did not recognise it as such.3 This article argues that the case of the motor industry in Poland (especially the CV or commercial vehicle sector) provides an instructive example of how the absence of a systematic industrial policy has led to unnecessary waste, and how its use might have resulted in a better outcome.