Have to wonder what the Big 3 had planned if the TARP legislation hadn't passed?Would bankruptcy have been on the table then?
People say they can't allow the Big 3 to fail.Sorry,too late.They've already failed or they wouldn't be asking for a bailout.However,in a free market,failure doesn't necessarily mean extinction.Yes, the current business model is a failure regardless of the credit crunch.Still,these companies hold tremendous value and importance to this nation even with a negative bottom line.They will be saved,resurrected,reformed,sold,restructured...choose your term or combination thereof.They will not be shuttered and sold off at a chapter 7 liquidation.
The true politics of this scenario emerged today with the Senate Republicans union busting attempt.Bush is certainly no fan of big labor,so a White House rescue seems unlikely.Congress has given away enough of their holiday break,so they are done for this session.
Could the Fed step-in to guarantee service and parts operations would be kept running in lieu of a Big 3 failure?If warranty concerns are truly a relevant issue in avoiding chapter 11,it seems the Fed is saving everything else these days,why not throw that out there for public consumption.
Public sentiment was overwhelming against TARP as it is now against the auto bailout.However,TARP was pre-election and certainly has diminshed value now.A revised plan with standard Congressional comprises wouldn't surprise as voter accountability isn't an issue for passage without public support.More to come...