jackiedoherty.org

It feels strange to be agreeing with Mitt Romney, but I have to second his opinion (in yesterday’s New York Times) that Congress should not bail out the Auto Industry. First, you have the ludicrous example of the three top Execs from Ford, GM and Chrysler all flying to Washington in their (separate) private jets. Representative Gary Ackerman (D. NY) is being quoted all over the web today with his witty comments, the clever analogy to a guy in a soup kitchen wearing a tuxedo as well as:

“Couldn’t you have downgraded to first class or something, or jet-pooled or something to get here?” Ackerman asked the executives at a hearing held by the U.S. House Financial Services Committee.

Rep. Brad Sherman (D. California) also chided the industry execs, but added:

“I also, though, must recognize that you’re in trouble mostly because of the economic downturn.”

I think it’s more than that. Romney calls for a total restructuring of the way the auto industry does business, something that a managed bankruptcy process would make possible. He calls for a collaboration between labor and management to end “the huge disadvantage in costs relative to foreign brands” as well as “accepting sanity in salaries and perks.” In The Economist last week, they agree that Chapter 11 is the solution:

The United States created Chapter 11 precisely to help companies that need protection from their creditors while they restructure their liabilities and winnow out the good business from the bad….The stigma of Chapter 11 (held up by the industry as poison for their business) would fade, obscured by price cuts, advertising and most of all news that the car companies were tackling their remaining problems…In many ways, Chapter 11 is more stable and predictable than depending upon the government.”