December 19 update: Congress denied bailout to the Big 3, but the Bush White House stepped in and did it anyway! And committed the new administration to just more debt and committments.
The big 3 (Ford, General Motors, Chrysler) flew in their personal jets from Detroit to Washington to ask Congress for money to bail them out of their financial crisis. The same old logic of "too important to the economy to allow them to fail.
Congress responded with "how are you going to use the money?" The big 3 flew back to Detroit to conjure up a Plan. And while the CEO's were plotting, Ron Gettelfinger, United Auto Workers president, descended on Washington with heavy-duty lobbying, press conferences, and smoke-filled room deal-making. Why? Because if GM goes into Chapter 11 bankruptcy, all contracts with UAW's pension plans, health plans, and the Job Bank* are cancelled.
And Chrysler? Mercedes sold their shares in Chrysler to a financial organization, which has the cash to loan Chrysler, but apparently considers Chrysler a bad risk and expects Bush's Treasury to bail them out anyway.
Ford apparently doesn't need bailing out, but won't turn it down in the interest of solidarity with GM and Chrysler.
By the rationale of our American free market, the big 3 auto makers have become dinosaurs and, like the dinosaurs, should fail. How did they become too big? Their union employee benefits became expensive. An average production line employee takes home $145,600 annually including health and pension benefits. Joe the Auto Assemblyman.
Meanwhile, there are non-union automakers in the South who aren't failing and are not asking for bailouts. But those cars are boring and sensible.
Can America sustain the loss of the manufacturers of testosterone vehicles?
So what if these dinosaurs go out of business? Their cars aren't selling in this economy anyway.
*Job Bank: laid off autoworkers get paid anyway.
