Today the Bush administration, with praise from President-elect Barack Obama, announced an emergency bailout of American auto makers, General Motors, Inc. and Chrysler, LLC, to the tune of $13.4 billion dollars, with another $4 billion possibly coming. These funds are coming from the first 350 billion that was approved for the massive nationwide bank bailout. Similar to the terms of those recent “loans” to so many U.S. banks, the delivery of these badly needed funds gives the feds the option of becoming a major stockholder in each of these companies, in part possibly nationalizing the domestic car industry as well.
Ford has not requested or accepted bailout money, indicating that such drastic measures are not needed at this time.
These bailouts are contingent on each company coming up with a plan for major restructuring and making it a viable business operation by March 31, 2009. If this is not accomplished, the “loans” will have to be paid back, which would most likely lead to ruin for each. Without the bailouts, it appears both manufacturers would be in line for massive bankruptcies and liquidation much sooner than that. This seems to be one last chance prior for each to create a productive and profitable future.
One of the big issues to look out for will be how the powerful unions might come together with the auto makers and make necessary and significant sacrifices now in order to give the companies and their families a chance to keep their jobs in the future. Everyone from the highest white-collar managers on down the ladder is expected to be affected by the restructuring.
During less extraordinary economic times, these bailouts would be much more controversial and would lead to massive partisan battles and infighting. Particularly given the fact that we are engaged in two expensive foreign wars, at any other time, we could expect outrage at such unheard-of assistance to any industry.
My personal instinct is still to feel some outrage at all of these enormous bailouts, but I think I feel as most others do…letting the banking and auto-manufacturing industries completely fail would greatly compromise everything we are and believe in as Americans. Today, while making headlines, this bailout and subsequent indentured servitude of sorts seems par for the course and predictable: there simply appears to be no other reasonable alternative.
Were the government to abandon the auto industry today and allow its collapse to devastating effect, no doubt the U.S.’s economic horizon would become significantly gloomier than it already is. President Bush indicated today that "It would worsen a weak job market and exacerbate the financial crisis," and could “…send our suffering economy into a deeper and longer recession." At this juncture, it’s hard to argue that point.
by: Greta LaMountain, Esq.
In these days of economic distress, the statistics show an ever increasing number of business failures with the prognosis for business bankruptcies reaching ever increasing proportions. These are not easy times to succeed in business. Such is the reality of the economic times. 
