Restructuring the D.C. Three
If Dems succeed in handing Detroit over to Big Green and Big Labor, the bailout will never end.


Henry Payne

Indeed, since the billions secured by the bill would only meet the cash needs of General Motors and Chrysler for a few more months, a broad coalition of greens, sympathetic analysts, and union advocates have begun building a long-term case that the Detroit Three must be permanently preserved to pioneer clean technologies and guarantee U.S. jobs.

United Autoworkers president Ron Gettelfinger sees the bailout as necessary because the collapse of the Detroit Three “would deal a serious blow to the entire economy, making the current recession much deeper and longer.” But a bailout, say analysts like McElroy, would also preserve the Detroit Three until such time as the UAW can begin campaigns to organize Japanese transplants under the Employee Free Choice Act — the so-called “card-check” provision that the union covets and that President Obama has promised to sign once in office.

On another front, Michigan economist Pat Anderson and auto consultant Kriss Andrews have found that Chapter 11 would be four times more costly than a bailout due to losses in employment, income, and tax revenue. Andrews seemed to suggest, in fact, that bankruptcy could never be a viable option for GM. And Anderson warns of losing a national asset, saying it would “fundamentally shift auto technology to foreign countries.”

Greens concur, arguing that government must guarantee the domestic automakers to preserve environmental security. “We need a viable domestic auto industry,” said David Friedman of the Union for Concerned Scientists, “to tackle America’s oil addiction while avoiding the worst impacts of climate change.”

But the argument for a green, pro-union, taxpayer-dependent domestic auto industry is at odds with designing a viable business model.

Fearing the collapse of one of the Detroit Three in its last month in office, the Bush administration Monday seemed willing to accept the House bill and put the auto companies on life support until the Obama Administration assumes office. But the questions about the Detroit Three’s viability likely will return next spring when the companies submit their restructuring plans to the car czar.

Will investors risk their money in “restructured” auto companies still burdened with the UAW and even more green mandates? Or will taxpayers once again be asked to rescue the Detroit Three from the only true restructuring solution, Chapter 11?

– Henry Payne is an editorial writer and cartoonist at the Detroit News.


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