By Richard Miller
Author, “In Words and Deeds: Battle Speeches in History”
Granted, no one likes pain. Everyone prefers to avoid it, including unions, auto parts suppliers, politicians, and auto manufacturers. So instead of confronting painful but necessary decisions in a bankruptcy proceeding, the aforementioned parties would prefer to sell a motion for progress under cover of a political bailout, which means less pain. Translation: fewer pensions cut, fewer salaries eliminated, fewer union jobs lost.
Sounds good, eh? Well, who wouldn’t opt to treat their cancer with a box of Cracker Jacks rather than chemotherapy? Tastes good, but unfortunately, it doesn’t work.
Of course, public perception in a major democracy requires theater–meme and trope laden fairy tales of greedy (or struggling) unions representing over-indulged (or just-above-the-poverty line) retirees and fat cat (or honest and
earnest) company managers who are either seeking bailouts on the taxpayers’
dime or just want to preserve a fine national resource. What the American leadership class learns quickly and excels at the most is theater.–In just two weeks, the Big Three CEOs have gone from flying private jets with big carbon footprints to working for a $1 a year and driving their own cars from Detroit to Washington.
In the meantime, a Chapter 11 filing for the companies they lead is presented as the business equivalent of Attila the Hun coming soon to a neighborhood near you.
Alas for the performers and their audiences, it’s not only a lie, it’s also beside the point. The automakers need to file for bankruptcy because that’s the only genuine bailout available. First, it will provide relief from creditors who are currently being overpaid or for whom there simply isn’t enough cash left to pay.
During the relief period that these creditors–yep, that includes auto workers, golden parachutees, retirees and the rest–cool their heels, the automakers under court and (perhaps) trustee supervision can start making real economic decisions—probably for the first time in two generations.
Eventually a plan will be filed and the car companies can emerge with debts they can actually service. And if they do their job right during reorganization, they’ll also emerge competitive.
Yes, it will be painful. Some creditors will be receive the traditional “zotz” on what they’re owed. Some blue and white collar workers will lose their jobs. Auto lines will be consolidated. Plants closed. And retirees will probably get less.
Despite the lies, bankruptcy isn’t pulling the plug–it’s offering new life. Not life on a respirator, but quality of life where the patient eventually has a chance to get out of bed and take a drive in his or her new, quality-built, fuel efficient (maybe even green) automobile at an affordable price.
But here’s question for my readers: if Detroit gets bailed in a way that doesn’t
really allow it to make the changes to become competitive with say, Toyota, how many of you are going to rush out and buy a Ford?
So I say, support the auto company bailouts… let ‘em file for Chapter 11.
