(1) GM, Chrysler, and Ford are on the verge of bankruptcy. On the verge, mind you.
(2) The Big Three employ about 250,000 people.
(3) All three have been struggling for years. Years in which the economy was up. But they were struggling.
(4) They lost market share to foreign competitors.
(5) Their cash reserves and credit have dried up.
(6) GM, the largest of the three, claims to be losing $1 billion a month. GM's Rick Wagoner went before Congress and said, "..without $25 billion loan, his company, and the others, would collapse."
(7) And $25 billion would be just the start. Even the government loan would not save these companies. An additional $55-$68 billion would be needed.
(8) For years GM has been building oversized and uninspired automobiles. Is it any wonder that no one was buying?
(9) Apparently lavish employee and retiree benefits along with strict work rules pretty much guaranteed inefficiency.
(10) GM compensates its workers an average rate of $73 an hour, as their competitors compensate their workers an average $48 an hour.
My suggestion has been, bankruptcy. Let them file. Granted, in these current economic climes they'd be hard pressed to survive a Chapter 11 reorganization. But maybe with a court-appointed trustee empowered to over-see a top-down restructure, we could possibly see these three car companies start over. Start over with new models, new management, and new labor contracts.
I don't see how a bailout could possibly result in a makeover of the auto industry. It won't save Detroit, regardless of the conditions applied.
