Bankruptcy will not eliminate the UAW. Congress must do something in order to weaken the power of the UAW, and bankruptcy has nothing to do with this process whatsoever. Even if the labor contracts are released in chapter 11 (which is a big "if" by the way), the UAW will just demand identical terms in a new contract. Will Congress do what needs to be done? Not unless the Big 3 lobby the hell out of them (trust me, I'm fully aware of the irony involved here), and they can't do that if they go bankrupt.

I agree with this article, especially at the end. People can no longer identify with the auto industry, and there is nothing exciting about them for the media to report on. I would submit there are several other reasons at play here. One being that people think they sound smart when they say a company should just go bankrupt, suggesting that they just then restructure and come out leaner. I love how nonchalant bankruptcy has become. In addition, I think Paulson et al. made a mistake letting Lehman fall--at the time they didn't think things would get quite this bad, so they didn't offer enough support for a buyer, and they didn't realize how much it would freeze the capital markets. After it collapsed and everything went to hell, they then realized they couldn't let that happen again. Now they have bailed out every single financial institution that needed it, even ones that have been poorly mismanaged, like AIG and Citigroup. Keep in mind that with AIG, the shareholders did get wiped out, the same end result as bankruptcy. Thus, the too big to fail and interconnected reasoning is just bullcrap.

The market tanked after Lehman not because Lehman was so "interconnected" and not because they were so integral to our economy. Indeed, the losses from counterparty risk and other investor losses in Lehman are supposedly not even that big, only a couple of billion dollars in total.

The market tanked because of an utter loss of confidence across the board. People finally realized that if Lehman Brothers could crash, then the subprime credit crisis and housing crash were going to prove to be seriously devestating to the economy and that the world was indeed headed for a deep recession.

That realization has already passed. The market has adjusted, and so the bankruptcy of GM is not going to do much more damage. Paulson bailed out every other bank after Lehman, so it has to do the same with Citi. These are the real reasons for the hesitation to bail out the Big Three.

It does not make you sound knowledgeable and smart to say "Let the automakers go bankrupt," nor do you impress anyone with your brilliant plan for their restructuring. I love how it's so simple to you people. I wish I had figured out how to turn around a multi-billion dollar industry, and it's so simple: just cut down on the labor costs that are so high "because of the unions." Also, why we're at it, they should just cut out the legacy costs as well.

Do you people not realize that the Big Three would do these things if they could or if they would indeed increase profitability???????? Do you people think they like paying such high labor costs?????? Do you not realize that if we truly had a free capitalistic market, then the Big 3 would move all manufacturing overseas, where the foreign automakers get to pay labor costs that are roughly 90% less, which obviously allows them to make better cars?

While I cannot say for certain as I am not extremely knowledgeable on labor unions, I do know that unions have power. The Big Three hate the unions, you can be sure of that. They don't deal with them because they want to--in fact, it's just the opposite. They absolutely do not want to deal with them at all. They deal with them because they have to. In addition, there are numerous, complex regulations and laws that have been created over the last 4 or 5 decades that have made attempted to keep the auto jobs in America. Our economy allows us to be competitive in pretty much every single industry, so do you really just think that foreigners are just simply better than us at making cars?

And as for the legacy costs, many of these benefits are the exact same in every industry, indeed in the financial industry as well. What most retards do not understand is that the auto industry employs more people than most other companies and industries, so these costs in total are obviously going to be higher. And going forward, I'm sure there are plenty of reasons they cannot just cut out these legacy costs. Maybe they are legally required to abide by them. Have you idiots ever thought of that?

Maybe I should just leave you with this: please realize that if it were so simple that you are able to realize it, then there is pretty much a 100% chance that the CEOs of the Big Three have already considered it.

A BAILOUT PLAN Congress should consider >

http://pacificgatepost.blogspot.com/2008/11/solution-for-detroit-gm-friends.html

Trying something outside the box like this, is the only way to save the U.S. Auto Industry.

There is much creative talent hidden inside the U.S. Big 3 that has been smothered by mismanagement and the UAW. ... and they actually "make" something, .... unlike Wall Street. Detroit deserves saving.

The banking industry deserves the same fate as Detroit. However, the idea of letting the banking industry crash is a nightmare no one wants to live.

The dopes running CITI and AIG would make great auto executives. Private jet fleets and corporate waste.

reduced risk -- both for the individual investor, and the economy as a whole.

Most "investment" does nothing to grow the economy -- most of it goes into pre-existing stocks. If anything, investing in "the stock market" is counter-productive to a sustainable economy, because the market is no longer about "the long term", but about arbitrage and quarterly profits -- and the demands to maintain stock prices and quarterly profits results in companies taking greater and greater risks until they fail.

We've fetishized the stock market (see the crybaby below, who is worried about his 401K -- he took the RISK, and now wants the government to bail HIM and HIS 401K out) and like some pervert who can no longer 'perform' unless it involves his fetish, the economy needs serious therapy that redirects 'drive' to healthier outlets.

easy to say, and provides some nice, satisfying revenge, but tens of millions of ordinary folks have 401k retirement accounts, which have mutual funds, and millions of those accounts have bank stocks. my own 401k, invested in a variety of "good" mutual funds, is down 40-ish percent since september. people like me don't need any more help like yours, thank you.

stocks are a risk. You took that risk. You lost. get over it.

All of the writing that I have had a chance to review indicates that the economy is full-scale in a period of contraction and businesses (of all industries) should be scaling back and matching up supply with demand. I do not see how or why there should be distinction between auto and banking or housing for that matter.

while there is a period of contraction throughout the economy, there is a huge difference between losing jobs through layoffs, and losing jobs when companies disappear. If GM goes down, the economy of entire cities and regions go down with it -- if Citibank goes down, that doesn't happen.

stop with the lies about "overpaid" UAW workers already. Starting salary for "unskilled" workers is under $15/hr, and the average "unskilled" worker earns $27.81/hr.

The real problem is the "legacy" costs -- the costs that exist because of retirees (including surviving spouses). At the end of the first quarter of 2007, there were about 181,000 UAW employees at the big three.... PLUS an additional 421K retirees and 120K surviving spouses.

Clearly, the problem isn't with the UAW workers, but the costs that are born by the auto companies in terms of pensions and health care costs for retirees. Cutting pay/benefits for current workers won't make a dent in these costs, and "shrinking" the companies won't shrink the number of current retirees.

The solution? Government takeover of these costs, funded by taxes on cars that are built by companies that don't provide pension and health care benefits to retirees. Even the playing field, and American union workers are extremely competitive -- but when foreign companies show up and exploit centuries of racism that result in low wages and anti-union laws throughout the south by building plants throughout the "hate belt", when people complain about unions its pretty obvious that they are endorsing racism and discrimination as a means of keeping wages low.

Yes, Detroit makes hybrids, but none are even close to the Prius, for which the waiting line is long. Yes, Detroit makes some gas-sippers, but none even close to the Civic. You can have your Yukon, I'll take a 4-Runner anytime.

For long, long ago, the UAW slipped on its blinders, and the membership as well, and personnally drove our Big Three into the ground. The story could have a happy ending but I doubt anyone cares enough to get done what needs to get done.... and believe me, what that is that needs to get done will bring some very long faces in the UAW and its past and present membership.