Detroit wants a dollar and it may get a dime. Congress may give The Big Three enough money to make it until early next year. GM (GM) and Chrysler are particularly desperate for funding. But, a small amount of cash will not do a thing to address industry problems.
Bankruptcies are still on the table.
Democrats are proposing to have a special session of Congress to provide money for the American car companies until the new president and Congress are in their offices. According to a number of media sources, there is no agreement on what happens next. That means options still run the range from Chapter 7 to pre-packed bankruptcies with the government as debtor-in-possession. to a huge cash infusion which would allow the firms to restructure themselves.
The trouble is that none of the longer term solutions may work. Which the chiefs of The Big Three have come to Congress with plans of costs cuts and negotiations with creditors, they have come up with virtually no plan about how to stop the slide of their market shares to the Japanese, especially in the face of domestic vehicles sales which could continue dropping though 2010.
In other words, absolutely nothing has been solved.
Douglas A. McIntyre
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