It’s interesting how we still find humor in this financial debacle. Who doesn’t see drollness when the CEOs of the formerly “big three” drive to Washington in their hybrid automobiles to beg for money… You have to realize that the fortunes of the American auto industry has been closely tied to the housing and mortgage industry. For example, during my business travels, I ran into more than one middle-income employee that exclaimed to me how they took out a home-equity loan to buy that new Cadillac Escalade. Obviously, that portion of demand for automobiles (35% of the market?) isn’t coming back anytime soon.
I fall into the camp of those who recognize that the US taxpayer is going to be covering the cost of the automotive industry failure — regardless of the legal bankruptcy process that the Government forces the manufacturers to pursue. For example, it’s very likely that the quasi-government organization (naturally, funded by us taxpayers), Pension Benefit Guaranty Corporation, will be forced to cover large amounts of the auto industry pension obligations. I’m only hoping that the companies leverage the Chapter 11 clauses that enable them to abrogate the labor and bond agreements, and enable them to truly restructure.
For more bailout sarcasm, click on the ‘toons below: