Not Even OnStar Can Guide This Trip

I’m sure that all the participants in the latest bailout negotiation for the US auto industry could press the OnStar button and guide them through this Solomon-esque quandary.

With labor rates which that are almost double their Japanese rivals, healthcare costs over four times over and still responsible for nearly 1 million UAW retiree’s benefits, the Big Three have barely a chance to take another $25 billion and somehow turn the entire industry around.

Investors Business Daily is vehemently opposed to any bailout and prefers Chapter 11 as a better alternative. They concede that the Congress will probably bail out the auto industry and the President will sign off. If they are successful, IBD said that the government should impose Chapter 11 type restrictions by legislating forced dissolution of contracts and mandatory re-negotiation. Without massive restructuring, the Big Three will continue to hemorrhage cash to their legacy obligations.

Don’t look for any a magic blue button to appear any time soon.

IBD: No givebacks, no bailout – HotAir.com