Network News

X My Profile
View More Activity
2.7%  Q1 GDP    4.57%  avg. 30-year mortgage     9.5%  Unemployment

Bush Says Bankruptcy May Be Option For Autos

An "orderly" bankruptcy may be the best way of handling the struggling U.S. auto industry, President Bush indicated today as he spoke before the American Enterprise Institute, a conservative Washington think tank. However, he said he hasn't decided what action he will take, the Associated Press reports.

White House press secretary Dana Perino said today, “There's an orderly way to do bankruptcies that provides for more of a soft landing. I think that's what we would be talking about.”

Bush said bankruptcies organized by the federal government could be an option.

“Under normal circumstances, no question bankruptcy court is the best way to work through credit and debt and restructuring,” he said to the group. “These aren't normal circumstances. That's the problem.”

Perino said: “The president is not going to allow a disorderly collapse of the companies. A disorderly collapse would be something very chaotic that is a shock to the system.”

But there are a lot of options out there, including short-term loans out of a $700 billion financial sector bailout fund.

Perino said the administration is close to making a decision, but would not lay out a specific timetable. The decision may not come this week, she said.

--Kim Hart

By Kim Hart  |  December 18, 2008; 12:09 PM ET
Categories:  The Ticker  
Save & Share:  Send E-mail   Facebook   Twitter   Digg   Yahoo Buzz   Del.icio.us   StumbleUpon   Technorati   Google Buzz   Previous: Wall Street Opens Up Slightly Before Falling
Next: Harry Potter Publisher Posts Profit Slump

Comments

I suppose this is better than nothing. It probably would have been better for the UAW to make concessions up front rather than to have them forced upon them in bankruptcy. However, lowered wages and benefits will probably put the Detroit 3 back on sound footing. My sympathies to the line workers for the pay and benefits hit.

Posted by: bdstauffer | December 18, 2008 12:53 PM | Report abuse

It's December 18th. The decision won't come this week and it surely won't come between Christmas and New Years. After that, it will be two weeks until Obama takes office. Like as not, after the holidays, the administration will say that they are, 'consulting with the next administration on a workable plan'. Face it, The Decider has reconciled to dump this mess on Obama.

The Big 3 have already indicated their belief that this is THe Decider's big plan by extending their holiday idles out past his presidency; essentially forestalling their judgement to the next President.

Posted by: chrisp339 | December 18, 2008 1:11 PM | Report abuse

Honestly I'm sick of this. People are writing in saying Citibank had outsourced even its customer service, and it was bailed out without even a question. I don't hear one word about the failed corrupt management plans of the banks and insurance industry being forced to change, but the Republican party is going to force an industry they may need in war employing real Americans into bankruptcy. I never thought I'd agree with William Kristol of the NYTimes, but he has a point saying Republicans will come to be seen as Marie Antoinette.

Posted by: realadult | December 18, 2008 1:14 PM | Report abuse

Six months from now, we will look back at the pile of scrap which was formerly our auto industry and wonder how we could have let this industry collapse, while at the same time we were shoveling trillions of dollars at the financial wizards who never worked an honest day in their lives.. The United States is well along the path to becoming a third-world nation. Look out below -- there's an elephant falling from the sky...

Posted by: jerkhoff | December 18, 2008 1:16 PM | Report abuse

There will be no help from bush other than utter the bankrupcy line followed by the Republican Party and the southern Senators that sold out American workers for their states foreign Auto industry. This isn't a party in favor of protecting American jobs but a party in favor of protecting its ideology, and desire to break employee unions.

Posted by: 1ken | December 18, 2008 1:17 PM | Report abuse

I never thought I'd find myself agreeing with the uber-incompetent W, but he may be right on this one. The auto industry reminds me of the steel industry in the early '70s. As a result of buying labor peace for decades, their labor costs are bloated to the point that their cars are nowhere close to competitive. Like Big Steel, autos will have to move basic manufacturing offshore and become technology innovators and specialty producers. Back in the '70s, everyone sounded like Chicken Little, certain that if Big Steel moved offshore the economy would collapse. They did, and it didn't.

Seismic change is long overdue in the auto industry. The irony in using the bankruptcy process to facilitate it is that the Bush administration has gutted it to the point that it no longer offers consumers any protection, but will still provide the promised "soft landing" to his pals in big business.

Posted by: salescoach | December 18, 2008 1:17 PM | Report abuse

Here me now and believe me later, wink-wink. McCain and his cloister have decided to represent the far right. Cheney appearing on the Rush Limberger show is a direct appeal to the Far Right.

Public opinion is to hate Elitists, like the Executives of the Big 3. The public already dislikes "Fly-boy" so making an unpopular decision will not effect W's ratings as in, "How low can you go ?".

History of the United States involvement into limited incursions (like Korea and Vietnam) is not a very good one to the Powers in charge. As limited incursions drag on, our leaders become less popular.

I will state that I believe egotism would lead to statements like, "Future generations will be thankful". I once asked "Do enlightened societies enter into limited incursions in the 21st Century ?". Someone called a few of these knuckleheads, Visionaries. Am sure true visionaries would have planned for occupation when democracy building or step 2 of Regime Change. Am sure visionaries predicted and planned for Civil War too, right ? Did a visionary plan and execute the "Mission Accomplished" Day event when the insurgency had just begun ?

Politics is a higher form of civilized society so did someone jump the gun ? I mean there has to be some measure of chaos turning into stability so at least the Rule of Law can function. And politics is not always the solution to modern day problems.

That brings me back to far right politics that indicate union busting and bankruptcy are the solutions here. The paper is coming due soon, what is the best 21st Century solution here according to the concept of problem solving ? Got a hint for you all, politics is a malicious interference on this deal in my not so humble opinion.

Posted by: truthhurts | December 18, 2008 1:19 PM | Report abuse

George W. Bush: One man's Santa is another man's Grinch. Bankruptcy of the American automakers would allow them to jettison their expensive health care and retirement obligations to their workers, in the same way that the airlines have done, with the consent of federal judges. Stockholders, officers and management of the auto companies will patiently hold their stock while it builds new value after the bankruptcy. Autoworkers, their families and their local grocers and landlords will be left holding an empty bag where benefits had once been bargained. Merry Christmas, President Bush. You know exactly what you are giving and to whom. I regret this choice of yours, so cynical and cold at Christmas.

Posted by: jsettich | December 18, 2008 1:21 PM | Report abuse

Bush weighing Bankruptcy for the auto makers will require much less of his attention thean whether he wants alcohol or drugs right now. Or whether we suould pursue Osama Bin Laden or go after Saddam Hussein.

Posted by: laurelphoto | December 18, 2008 1:22 PM | Report abuse

The hot potato part of the bankruptcy solution for the ever partisan Bushies is that, while the
big 3 factory workers tend to vote Democratic, the owners of the dealerships tend to vote Repub. There are too many dealerships now because of the big 3 losing market share but, the dealers have had laws written to protect them from being shut down. A bankruptcy judge could close some dealers down in spite of those laws and that is what the Bushies are struggling with. In other words, they would like to bail out the dealers but not the factory workers.

Posted by: rkerg | December 18, 2008 1:24 PM | Report abuse

HEY BUSH I HAVE A QUESTION WHO'S GONNA BUY A CAR WHEN NOBODY HAS MONEY TO DO SO.. WHEN THE GOVERMENT STEAL 8 TRILLIONS FROM THE TAX PAYERS IN THE PAST 6 MONTHS FROM BAILOUT AFTER BAILOUT AFTER BAILOUT.. AND THE ROTHSCHILD BANKS ARE TAKING ALL THE CREDIT FOR THIS SH¡T..

Posted by: V_1618 | December 18, 2008 1:24 PM | Report abuse

Although there is risk that the UAW retiree health fund may get dumped, at least the Pension funds for the hourly and salaried folks are paid up.

Which brings up an important point.

The U.S. pension plan for the masses is Social Security which is government run, doesn't pay out enough for a decent living and is going broke. 401K's and Roth IRA innovations, for most people are not a viable supplement since most people are not savy enough and/some employeer plans don't even offer enough options to manage well if you do have the skills.

On the other hand there is the GM pension plan virtually fully funded prior to the Financial meltdown and still so after the fact. Why?? Cause its managed by pros.

Which brings me back to the important point, why aren't privately managed pensions the model for all vs. the broken crap alternatives???

Posted by: smoothsailing | December 18, 2008 1:34 PM | Report abuse

one possible outcome of a Chapter 11 which could turn into a Chapter 7 is the birth of the Chinese auto industry in America.

The Chinese have spent billions ramping up production capacity for their auto industy, in some cases with help from U.S. companies, notably Ford and GM.

Imagine a sceario where either or both of these companies are unable after an "orderly" Chapter 11 to compete and their creditors insist upon a liquidation. Who will be there to bid for the factories, dealer networks and brand names available? The Chinese of course. All they will have to do is cash in a few of the several hundred billion tbills they hold and, voila, instantly they become a big dog in the U.S. auto market.

They will hire a few layed off execs to help the transition here and to sift through the best assets and begin to import low price cars designed and made in China to supplement those which will be made here (e.g. pickups and Cadillacs) in non-union plants.

What will be left is a truly global enterprise only it will not be owned by Americans and its factories will be under their control should we need them for any national emergency. So in the end, we will lose not only a few hundred thousand jobs but a vital national security asset.

Next time you shop at Walmart for those great everday low prices, just remember that globalization does not always produce a great end benefit, unless, of course, what you care most about is getting the lowest possible cost on a t-shirt or pair of sneakers.

Posted by: bobfbell | December 18, 2008 1:42 PM | Report abuse

What? You mean the Left's New Messiah won't be able to fix this entire problem just by raising taxes even more?

Hey, maybe forcing Detroit to build EVEN MORE cars that no one wants will do it, yeah that's the ticket.

Sorry chumley, Detroit must declare bankruptcy so they can level the playing field with other car manufacturers currently operating facilities in the United States.

Reality hits the Left like a windshield hits an insect at highway speeds.

Posted by: NeverLeft | December 18, 2008 1:55 PM | Report abuse

The comments to this entry are closed.

 
 
RSS Feed
Subscribe to The Post

© 2010 The Washington Post Company