Some Evidence that the Bailout of the Car Companies is to Protect Union Workers from any cuts
CNBC has this piece:
United Auto Workers President Ron Gettelfinger said it is critical the Big 3 receive a financial aid package from Congress to avoid one or more of Detroit's auto makers from sliding into a Chapter 7 bankruptcy.
Chapter 7 bankruptcy would mean a liquidation, or going out of business for an auto maker.
"We are in a crisis," Gettelfinger said. "We need a package approved by this lame duck session of Congress. If we don't get it, I'm not sure some of these auto makers will make it to mid-January when Barack Obama becomes president." . . .
Gettelfinger said the auto makers would slide from a Chapter 11 to a Chapter 7 bankruptcy because potential buyers will not but from a company that may or may not be around in years to come. That would mean already weak sales could plunge even further and reduce revenue for the Big 3 even more.
Labels: bailout, mortgagecrisis
posted by John Lott at 12:02 PM
1 Comments:
Correct. We are likely going to see over the next couple of years the highest unemployment rate in the U.S. since the Great Depression. One major contributor to the problem will be the demise of the "Big Three" car makers.
As we try to fix the problem of the credit bubble, we also will begin to face the twin problems of the demographic bubble of the baby boomers retiring and dramatically more expensive oil.
It's hard to be very optimistic.
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