Grand Theft Auto Bailout 2: Electric Bugaloo
“Your ignorance of the auto industry and its impact leads me to seriously question you ability to form realistic opinions on the other events that you comment on. It is becoming more and more clear that you are not nearly as astute as you present yourself. Your credibility is sinking quickly.” – A reader in response to my “Grand Theft Auto Bailout.”
That comment was in response to my opposing the auto bailout back in January. It was my opinion that it was a bad idea. I didn’t understand why we were bailing out Ford (who didn’t want a bailout) and Chrysler (which is owned by a private equity firm that had more than enough money to bail Chrysler out itself if they thought it was a good investment). My feeling was that we were going to give the auto industry a mulligan, and they were going to come back asking for more money.
And it wasn’t just me. It was anyone who opposed the bailout.
Talks between the United Auto Workers and General Motors Corp central to a turnaround plan for the struggling automaker have broken down over the issue of retiree healthcare costs, a person briefed on the talks said on Saturday. A parallel set of talks between Chrysler LLC and the UAW over similar concessions were continuing over the weekend but little progress had been made, a person briefed on those negotiations said.
General Motors Corp., nearing a federally imposed deadline to present a restructuring plan, will offer the government two costly alternatives: commit billions more in bailout money to fund the company’s operations, or provide financial backing as part of a bankruptcy filing, said people familiar with GM’s thinking…The competing choices, which highlight GM’s rapidly deteriorating operations, present a dilemma for Congress and the Obama administration. If they refuse to provide additional aid to GM on top of the $13.4 billion already committed they risk seeing an industrial icon fall into bankruptcy.
President Obama has given up on landing a “car czar” to oversee the auto industry’s restructuring. Instead, Treasury Secretary Tim Geithner will be in charge, administration officials said Sunday night… Members of the task force will be drawn from relevant cabinet agencies and offices, including the Departments of Treasury, Labor, Transportation, Commerce, and Energy, the National Economic Council, the White House Office of Energy and Environment, the Council of Economic Advisers and the EPA.
Buckle up.
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