So, the “
inevitable” automotive industry “bailout” isn’t going to happen
quite so quickly, giving me a little bit more time to wonder: Do the leaders of Chrysler, Ford, and GM
really want a bailout? It’s a question that ought to be considered before they enter into the sort of open-ended support that — with a Democratic hold on the executive and legislative branches of government — would almost certainly lead to a miserable cycle of labor, environmental, and consumerist prescriptions that they’d be compelled to carry out, with little concern by their federal patrons for returning these companies to the autonomy that private companies are expected to maintain?
As bad as it may be, the deal that’s slipping away now,
agreed to by the Republican White House and Democratic Congressional leaders, and involving short-term financing with a government administrator to coordinate some sort of federally endorsed reorganization plan, is probably more conducive to their long-term autonomy than anything likely to come together in the next Administration. Still, this deal would mean a continued role for the UAW, the continuation of CAFÉ regulations and domestic-content provisions, and continuation of who know's what other organizational impediments that have helped ossify the auto industry in recent decades.
Do the leaders of the Big Three really want to preserve those conditions? That is, do they want to continue competing against nimbler transplant automakers and foreign competitors, who do not have the super-sized workforces, the surplus capacity, the redundant brands and models, the overextended dealer networks, and the skeptical consumers that now plague the domestic automakers?
Do they want to take taxpayers’ money, while keeping in place much of what now accounts for their miserable circumstances, and then ask U.S. consumers to buy their products?
Why would the leaders of Chrysler, Ford, and GM
not prefer to undergo a bankruptcy reorganization, which would allow them to suspend their credit obligations, rewrite contracts, reshape their organizations with bold creativity, and redefine themselves in the most favorable way to their stakeholders and customers?
And, if they really would prefer a bankruptcy reorganization, don’t you suppose the UAW and their supporters in Washington would try to stop that from happening, because of the possibility that the bankruptcy court will toss out their current labor contract? And, wouldn’t the representatives of lenders and creditors be just as fired-up to impede a Chapter 11 reorganization procedure?
Is it possible that these automakers are just going through the motions of needing a bailout — which will outrage most Americans — in order to be “forced” to go through reorganization? That way, the United Autoworkers union, their lenders, and their creditors won’t be able to blame the management of Chrysler, Ford, and GM for seeking bankruptcy-court protection. They will have had no choice.
Am I being too cynical?