It seems like we are faced with a simple choice:
1. Let the Big 3 go bankrupt with all the ensuring ripple effects throughout the economy leading to hundreds of thousands jobs amongst Detroit's suppliers, dealers and ancillary industries.
2. Give the Big 3 $25 billion with no strings attached so that they can use it to go bankrupt with all the ensuring ripple effects throughout the economy leading to hundreds of thousands of job losses from the business failures amongst Detroit's suppliers, dealers and ancillary industries.
3. Make the loans and make them NOW.
BUT... let's go this route (4) instead:
Learn from AIG - this money has to have serious STRINGS like these listed:
* Appoint a regulator or oversight board - Open the books - and go to work
* IF pensions are the problem eject them to the Pension Guarantee Trust
* IF healthcare costs are crippling; transfer payment to the ones being insured
* IF CEO/Exec pay is out of line with Toyota/Nissan etc. reduce it and restrict it in the by-laws
* IF UAW contracts are non-competitive - void them and start over
* IF Cheap imports are being sold below US production cost - tax them
* IF white-collar salaries are too high - cut them
* Future profits will be used to pay off the loans
* Included in the corporate charters will be minimum cash and re-investment rules
This is the path worth taking. Much pain will be endured to save the industry - the medicine is going to taste bad for all involved, especially us taxpayers!
We all have "too much to lose" if the 3 US automakers FAIL.
[We will spare you the what ifs]
Which is the better option?
