Investor’s Business Daily: Prepackaged Failure.
Congressional Democrats are desperate to bail out the Big Three — but even more desperate to bail out the automakers’ unions. After all,the UAW spent more than $11 million in the last election cycle to elect Democrats. They’re owed.
In recent days, talk of a “prepackaged” bankruptcy has come to the fore. In such a case, the parties involved — shareholders, management, unions, creditors — would negotiate a kind of working settlement. The idea is to avoid a liquidation, while also getting access to the $34 billion in bailout funds the industry says it needs.
It’s not the worst idea. But it doesn’t stand a chance because the unions reject it out of hand. As UAW President Ron Gettelfinger put it, prepackaged bankruptcy is “not a viable option.” Translation: Unions would have to make big, and permanent, concessions.
That leaves the latest bright idea from Congress: a broad, federally mandated restructuring of the Big Three in exchange for financial help. Congress would in essence become the Big Three’s uber-manager, telling them how to become profitable again.
Excuse us, but are we supposed to believe that the same Congress responsible for next year’s estimated $1 trillion deficit can profitably run a market-sensitive company like a car manufacturer?
Or that the same Congress that sat on its hands as the financial meltdown unfolded and helped create the mess will know how to financially restructure America’s highly complex auto business?
Or that the people who just last year imposed $85 billion in new “efficiency” standards on a teetering industry will be savvy enough to run them anywhere but further into the ground?
These are not rhetorical questions. Preliminary results from our latest IBD/TIPP Poll show sentiment running 62% against a bailout for the automakers. With its own favorability at a subterranean 9%, lowest in history, Congress might want to think twice about it.
Los Angeles Times: UAW Gives Ground to Aid Big 3’s Chance for Bailout.
Amanda Carpenter: UAW “Needs” the Bailout, Has Money for TV Ads.
CNN: Six in 10 Oppose Auto Bailout, Poll Shows.
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