Automaker Bailout Talk Increase

With all three of the major leaders in Washington in favor of baling out Detroit, it seems likely to happen. GM, in particular, is in such bad shape it may not make it until Mr. Obama is inaugurated. Republicans are surprisingly showing some backbone and resisting, however, since they have long since used up all their political capital, it is unlikely they can affect the outcome.

As I've written before, I do not believe that Detroit should be bailed out. At the rate they are burning through money, it would never be recovered, and would only delay the inevitable. Both the executive teams and the unions need to have their positions completely reworked. The best thing that could happen is that the Big Three were sold to Toyota, or to a lesser degree another Japanese car maker. They could then take the company into Chapter 11 and rework the absurd union deals, or better yet, scrap them. They could then institute modern manufacturing techniques and teach them that you need to make a profit, and also set money aside for market downturns. However, this will not happen, because Americans believe in babying American corporations. One of the reasons Detroit is in the position it is is because they were always treated as the spoiled favorite child who got special treatment from the parents. Americans would rather give tax money to Detroit, and still have it run into the ground, than let itself be saved by the Japanese. The free market needs to work, and as long as sentimentality keeps it from being brutally efficient, the problems will remain.