The charade playing out today on Capitol Hill in Washington D.C. on whether or not to bail out Detroit's Big 3 auto manufacturers is a farce. Of course they will be bailed out. The question is whether it will be on a more moderate basis that President Bush would be willing to sign right away, or on far more grandiose terms the United Auto Workers-beholden Democrats vote in after the new Congress takes office in January.
Make no mistake about it: this is a bailout of the extremely-generous pension funds, health benefits and other perks of the United Auto Workers (UAW) union members, and not of the companies themselves. They are dead meat, and the Democrats could care less about them. But their handmaidens in the UAW? How much do you need?
Just as the airlines, steel manufacturers and other industries survived and got stronger after filing Chapter 11, the auto manufacturers would too. The only hope that have, just as with these other industries, is to shed their onerous, burdensome UAW contracts and get busy competing with the Japanese, Korean and German firms already operating efficiently and profitably in the largely non-union southern United States.
The only way to shed these Big Labor behemoths is through bankruptcy court. The UAW had made a few "window dressing" changes in their contracts, but major surgery is needed, and only a bankruptcy judge can force that.
This would not be the unmitigated disaster the bleaters and moaners in Congress are bellowing about today. There are ready buyers for the profitable parts of GM, Ford and Chrysler, who would continue to buy parts and components to build cars from the Big 3's current suppliers. This realignment is the future of the business, and it ought to be done now with minimal taxpayer dollars, rather than later, after the feds have poured $25-$50 billion of your money down the UAW rathole.
If Congress does nothing now, it might accidently force at least GM into bankruptcy court, to get the process started. If Congress passes some stopgap plan now that Bush will sign, they'll almost certainly hang on for a major Democratic handout come January.
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