An earlier quip about Wall Street and Washington staging a merger might have to be expanded now to address the likelihood of that conglomerate taking over Detroit, but it’s too late to complain. Something is going to happen, and the automakers are going to be restructured. The details of the restructuring will be determined by political interests, rather than organizational strengths and needs.

The automakers have not been shy about taking federal money, but every dollar they get has conditions attached. CAFE standards — by which federal regulators dictate product developments that hinder the automakers' competitiveness and technical progress — are just the most obvious example. The most recent example is a package of loan guarantees (as planned, $25 billion now, another $25 billion to come) that involves promises to modernize operations and develop more fuel-efficient vehicles. It has no provision for downsizing or streamlining the organizations.

Now, in an atmosphere of financial panic, forces working to uphold free-market principles have been pushed to the margins.

Less government regulation might have allowed the domestic automakers to restructure a long time ago, and the result might or might not have been a globally competitive industry. But, it certainly wouldn’t have created the impossibly dysfunctional organizations that — even accounting for some notable skills and strengths — are on the brink of dissolution.

The automakers chose government assistance over market principles. Because the automakers defied the market’s signals for so long, the market is now crushing them by starving them of cash — consumers’ cash and lenders’ cash.

How much taxpayers’ cash may be appropriated to try resolving this is unknowable, but it will not come with any clear objective of being competitive. The objectives will be political, not organizational, and not market-focused. 

The role of the United Autoworkers union has been obvious. The union has worked to ensure that the automakers assume all the risk for its members’ security, and it continues to have federal help upholding that principle.

Months and years from now, we’ll wonder what might have happened if the 2007 labor agreement — by which the UAW agreed to take over its members benefits obligations — had been reached a few years sooner. Even within that agreement, the automakers were obliged to maintain employment totals and operations that were not (in 2007) viable.

The automakers long have realized the restrictions that unions put on their success, and yet with political considerations always in the forefront they have tried to work their way through it.

Can the forthcoming restructuring do any better to define viable, competitive organizations?  GM, Ford, and Chrysler may know what it takes to compete in the global automotive market, but with no other cash available to do it right they’ll instead have to do it on the federal government's terms.