Comment & Debate
Jack Kelly. “Auto Bailout Won’t Prevent Bankruptcy”. Real Clear Politics. 2 Dec. 2008 – “of course Detroit will never recover under this [bailout] plan, because its whole purpose is to avoid the one step actually necessary to make the automakers profitable: breaking the hold of the bloated unions. Let’s be clear on that. The purpose of the bailout is not to avoid the destruction of automobile production in the US. Plenty of automobiles are being produced in America by Honda and Toyota and other automakers–at non-unionized shops. And if the Big Three were to go bankrupt, they would likely be bought out, or at least their most valuable pieces would be scooped up by new owners. But if GM goes into bankruptcy, its contracts with the unions would likely be thrown out–you can’t have a contract with a defunct firm–and the new owners would be able to negotiate new contracts from a position of strength. Accept our terms, they would be able to say, or you will all be out of work permanently […] That is what a bailout is really meant to avoid: anything that would break the power of the unions. This is not a bailout for GM. It is a bailout for the UAW.”