Here's a Deal For Detroit: Mend Your Wasteful Ways

While congressional Democrats are still trying for a $25 billion bailout of America's auto industry, and while the Bush administration remains reluctant to shift any of the vague-but-vast $700 billion bailout in Detroit's direction, some leading financial commentators are taking a hard line to the plea of the Big Three: Let 'em sink under the weight of poor executive decisionmaking and union intimidation.

Labor and management are sweetness and light with each other as they testify on Capitol Hill that our senators' and representatives' failure to ride to the rescue might well mean the death of one motor company, maybe more.

The fallout could be devastating — not just jobs lost on the assembly lines, but also at hundreds of companies supplying components of cars and trucks: brakes from one company, ignition switches from another, windshields from still another. Some have close corporate ties to the main manufacturers, some don't — but they and their workers are dependent on vehicles coming off the line and reaching drivers by way of the sales floor.

No cars, no sales — and no jobs for scores of Southern Coloradoan’s at our town’s dealerships, not to mention out-of-work colleagues in showrooms across our nation. Yet some of that could happen anyway if General Motors merges with Chrysler, aided and abetted by Congress.

Just cut us in for $25 billion, and maybe we'll make it ... Does that sound like an addicted nephew begging Uncle Sam for enough to buy another ounce?

Congress already lent our automakers $25 billion this fall — to re-tool factories to produce the fuel-efficient cars they insisted for years that they couldn't make.

It seems to us that Congress has a couple of choices: Gamble that second $25 billion, and who knows how much next time the executives come hat in hand — but do it with strict conditions: higher fuel-efficiency and clean-air standards, attainable but firm; bookkeeping controls that limit executive pay and executive deadwood as well as union salaries and benefits.

B-b-but you can't do that; this is free enterprise ...

So be our guests: go bankrupt — not the close-the-doors kind, but what's known as Chapter 11 of the bankruptcy code: It keeps creditors at bay while the company reorganizes itself.

Under tough bankruptcy judges, the companies would keep turning out cars, but under a new set of rules: reduction of high union and management wages — and the high health and retirement benefits that are throttling the companies' competitiveness.

Let whoever might complain take comfort that he or she still has a job — which is more than the hordes laid off in many other industries have. As for shareholders clamoring for dividends, give 'em a similar answer: Don't hold your breath; just hope we come out of this with any share value at all.

If cash infusions are still needed, Congress could provide them as part of the reorganization process. Maybe it'll take a merger or more — but as long as Honda, Toyota and other competent competitors are around, with plants here in the U.S., anti-trust concerns shouldn't keep consumers awake at night. It'll be hard for some senators and representatives to resist the urge to punish our long-blithe auto industry — but they've got to find ways of sustaining it while it shapes up, as we think it can under tough guidance.