Sunday, December 7, 2008
Auto Industry Fearmongering
As a caveat to my last post about the auto industry, I wanted to mention an important fact that a lot of people are starting to learn. If the auto industry doesn't get the bail-out funding it's seeking, it's not the end of the world. The whole system will not come crashing down. First, there are other government agencies besides congress that can give the big three money. Second, the worst that happens is that they file for chapter 11. What does that mean? It means they get to do things like the government enforced opportunity to renegotiate (currently ridiculous) labor contracts. It's designed to delay some of their debts and let them get back on their feet, but demands they adjust and become more fiscally efficient as they get back on their feet. It helps cut the fat and the U.S. auto industry is currently a 350lb executive trolling around gold-laden offices in one of those electric sit-down scooters. There are more options, people, so calm down. These guys aren't down for the count. They just have to learn how to do things smart again.