For the “Big Three” U.S. automakers, hoping for a quick financial bailout from the White House, no news cannot be good news. On Sunday White House officials said that no announcement was expected Sunday or Monday while President Bush was in Iraq, having a pair of size 10 shoes thrown at him at a press conference. Bush, showing excellent reflexes, managed to avoid getting whacked on the head.
And now it is Tuesday and still no word. The thinking seems to be that the administration is weighing options on how much of a bailout and what are going to be the terms. Senator Bob Corker, Republican-Tennessee, said he spoke with the White House on Sunday. “I don’t think they yet know what they’re going to do,” Corker remarked. Ron Gettelfinger, president of the United Auto Workers said the administration and the union had not held talks. I would think or hope that no money would go out unless the union makes some serious concessions to the automakers. Without these concessions on stopping jobs bank (laid off union workers collect 90-95% of their wages until the labor-automaker contract ends) and reducing employee wages, along with big changes in how the U.S. automakers operate, I do not see how the automakers can sustain operations and suspect they will only be back for another bailout, crying bankruptcy once again next year. But President Bush had earlier said that we could not allow the “Big three” to fall into bankruptcy, which would be devastating to the U.S. economy already in a recession.
So which of the automakers will get a bailout? How much is Bush willing to handout? And will Bush authorize the funds be taken from the $350 billion remaining for the Wall Street bailout? GM and Chrysler say they will be out of cash within a few weeks and will have to file bankruptcy. Ford, who was able earlier this year to obtain cash and feels they will be OK for cash in 2009, wants a just-in-case-things-get-worse credit line.
Lots of questions to be asked and answered. The only real question worth answering is will a bailout work.