>>A possible compromise might be to let them file for bankruptcy, which would allow them to radically restructure their finances, and have the government provide the DIP (Debtor-in-Possession) financing. Would that be palatable to the unions? I doubt it. <<
Given the alternative, the unions will have to accept some kind of deal, palatable or not.
While I'm no great fan of propping up ailing corporations, the current environment really does mean that C F & GM can't be allowed to fail.
In any case, it wouldn't be politically acceptable for the incoming administration, and given the necessity of a big economic stimulus in any event, it would be dramatically counterproductive.
In better times, Chapter 11 without government intervention might have been an option, but it's not realistic now.
Having said that, any scheme must include a fairly drastic restructuring to give whatever remains a chance of being viable.
If the government is putting up the money, it should be in a position to enforce whatever structure it wants. It must use that power. |
