Excerpt from the East Valley Tribune, December 19, 2008. By Jennifer Loven, The Associated Press
Carmakers anxiously await Bush’s decision.
In what can’t be good news for automakers the Bush administration is looking at “orderly” bankruptcy as a possible way to deal with the desperately ailing U.S. auto industry, the White House said Thursday as carmakers readied more plant closings, and a half million new jobless claims underscored the deteriorating national economy.
With General Motors, Chrysler and the rest of Detroit anxiously awaiting a White House decision on billions of dollars in emergency federal loans, press secretary Dana Perino said it wasn’t simply a choice between government rescue and the disastrous collapse of a major industry. Perino said, “There’s an orderly way to do bankruptcies that provides for more of a soft landing. I think that’s what we would be talking about.”
President Bush spoke of the idea of bankruptcies…without committing to it. “Under normal circumstances, no question bankruptcy court is the best way to work through credit and debt and restructuring,” he said during a speech and question-and-answer session at the American Enterprise Institute. Bush added, “These aren’t normal circumstances. That’s the problem.” Bush also said he hadn’t decided what he would do but didn’t want to leave a mess for Barack Obama.
Perino emphasized there were still several possible approaches to assisting the automakers, including short-term loans from the Treasury Department’s $700 billion Wall Street bailout program.
The Big Three automakers said anew that bankruptcy wasn’t the answer, as did an official of the United Auto Workers who called the idea unworkable and even dangerous.
In other related news Bush fretted that “This is a difficult time for a free-market person. Under ordinary circumstances failed entities should be allowed to fail. I have concluded these are not ordinary circumstances, for a lot of reasons.”
So with more auto plant closings, Chrysler employees taking a 4-week vs the normal 2-week Christmas holiday break, poor U.S. auto sales, tight credit, no help from Congress and now the White House talking about an “orderly” bankruptcy process as a possible solution, this can’t be sitting well with the automakers or the UAW.
Jeff Polhill