Finally, with almost six months gone since the financial problems of the domestic automakers became most acute, they are acknowledging that bankruptcy is an acceptable option. To those of us who have been arguing for this step since the start of this year, it's rather annoying to have this happen so late — after so much money, and value, and opportunity has been lost by their efforts to avoid bankruptcy.

According to the latest report, Chrysler, the UAW, and Fiat (the automaker designated to take over Chrysler) reached an agreement on a takeover that meets Washington's requirements for the automker to receive more federal money. The union workers are due to vote on new contract concessions this week.

General Motors may or may not get to bankruptcy court, but it came forth with a plan that should clear it to get a new cash advance from the government — agreeing to give over more equity, eliminate the Pontiac brand (by 2011), reduce the number of its dealerships by almost half, and cut another 21,000 jobs.

Would it have been any worse to do this back in December? Or January? The pain and misery in all this has been unavoidable, and all sides in these negotiations share the blame for avoiding the inevitable and forcing U.S. taxpayers (non-participants in the negotiation) to pay a heavier cost.

Would it have been any better to do it the standard way — in a bankruptcy court that fairly weighs the claims and liabilities of all sides in order to re-establish the enterprise in some responsible fashion? Absolutely. Consider the case of Transcast Precision Inc., an aluminum diecaster in Canada that earlier this month was momentarily ordered by a court there to deliver component parts to Chrysler, GM, and some of their suppliers without any agreement on price, terms, or assurance of payment. Just like that, a government has the power to choose a favorite and punish a party that is not responsible for the failure.

This is what a bankruptcy filing is intended to avoid. And, happily, the Canadian federal court in that case modified its ruling. 

But, the confusion and indecision about these serious matters have been unnecessary. The unwillingness of the automakers to accept their fate, the determination of the UAW to avoid concessions on every substantive issue (other than job totals, which they know they cannot defend), and the "patience" of federal officials hopeful of orchestrating an industry it can manipulate, have made a bad situation worse than it had to be.

Hundreds of businesses have been ruined by the large-scale intransigence of these parties. And all of us are paying for it.