"You've been talking about a Chapter 7 liquidation, which would affect the supply base, affect the other two [automakers] and ripple across this economy like a tsunami that we haven't seen, and it seems to me like a huge roll of the dice." - General Motors CEO Rick Wagoner.
Translation: "Due to our own short-sightedness, poorly negotiated contracts and gross mismanagement we find ourselves on the edge of insolvency. Give us a big pile of money or we'll go under and drag the whole economy down in our wailing death throes."
Most Americans are ready to let the Big Three fall; some are clearly relishing the idea with macabre delight. Someone has to pay for what all the greed and arrogance has wrought, and Detroit has made itself conspicuous with its recent extortion attempt before Congress. Too many Americans fear that all the money tossing isn't going to fix anything. And bailing out all the banks and insurance firms has really stuck in their craw.
It would be different if Chrysler, GM and Edsel actually produced vehicles that were affordable, reliable and had a planned obsolescence of longer than five years. But they don't. They churn out steel monstrosities that are rendered completely impractical by high gas prices and have the nasty habit of rolling over and bursting into flames if a pigeon poops on them. Add the fact that Detroit has long been exporting American jobs by the truckload and you have an obvious target for the massive backhand to the face that America has been holding back since the first 700 billion. God, that will feel vindicating.
Bankruptcy actually seems the best option for the Big Three, despite the whining of certain CEOs doomed to a comfortable banishment after a little mild public embarrassment. Detroit would blow through 25 billion in a few months just satisfying its pending contracts. Parts manufacturers and dealerships are close to deciding they better get their pound of flesh while there's still some meat on the rump. But a Chapter 11 means government protection from those prowling raptors. It means a chance to renegotiate all those ludicrous contracts with the unions and others. Of course it also means they'll probably follow the banks' lead and bury their money in Mason jars in the backyard. Screw innovation.
It won't go that far, though, Congress has already given the Big Three time to craft a more penitent and supine demand for money. There would be severe economic consequences if they combusted. And Barack Obama Superstar would never think of starting his reign with thousands of blue collar workers losing their jobs.
Detroit will get the billions needed to keep belching out SUVs for a few more months. But the Big Three look perfectly uncaring and clueless as to how this happened. And considering these are the people who thought the Chevy Volt was a good idea, that's not surprising.
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