“Auto companies: repair yourselves” is the heading to a Dec. 10th editorial. It goes on to opine: “The $15 billion is only a down payment of what General Motors, Chrysler and Ford will request to get through the financial crisis.” It then sagely states: “Bankruptcy might benefit the bloated auto industry. It might require executive to do more than give up their salaries and private jets. It might force them to restructure the industry. It might force them to design cars that American really want.”
WATCHDOG: Two observations:
(1) On Dec. 11, Bloomberg.com reports: “Senator Bob Corker, a Tennessee Republican, is offering an alternative that would require bondholders to take 30 cents on the dollar and would set wages similar to foreign companies such as Volkswagen AG. It also would give the United Auto Workers union half of the $23 billion it’s owed for health care as GM stock instead, and eliminate a program in which UAW workers are paid not to work if there’s no work for them.”
When the Watchdog went to bed late Thursday evening, the report was that a Corker sponsored compromise bill calling for mutual sacrifices (‘haircuts’) had been accepted by all of the stake holders, thus promising to put GM and Chrysler on a fairly sound financial footing and much better able to compete. Alas, upon awakening, the unions had rejected the arrangement. They insisted that their benefits not be reduced until 2011, probably reasoning that even under Chapter 11 or the Bankruptcy Law that reductions would not take place much earlier.
(2) In these troubled times which are a virtual ‘perfect storm’ for newspapers, we hope that the Lancaster Newspapers, Inc. is heeding its own good advice.
