I wonder which will snap first, the Obama Administration's willingness to put up with the stakeholders' unrealistic notions of what is possible in the auto industry or the Obama Administration's willingness to protect the taxpayers from more rounds of bailout in lieu of bankruptcy. From yesterday's New York Times:
“We’re going to need a restructuring of these companies,” the adviser, David Axelrod, said on “Meet the Press” on NBC. He added that a turnaround of the companies would “require sacrifice not just from the auto workers but also from creditors, from shareholders and the executives who run the company.”
The automakers had been expecting the appointment of a car czar to break the logjam of negotiations with the United Auto Workers over the finances of a retiree health care trust, and with bondholders about reducing the companies’ debt.
This is what bankruptcy proceedings do and where these negotiations should be taking place. For a picture of what should be happening, see this earlier post.