December 18th, 2008
06:26 PM GMT
NEW YORK – Here we go again. A major U.S. company, actually two, are on the verge of collapse. People are concerned about what kind of ripple effect that might have on the broader U.S. economy and yet, the Bush Administration dithers. Well, that might be too strong a word. They are probably crunching numbers, calling in experts and hotly debating what to do over autos. But so far, they are not acting. And the companies are quickly running out of money.
Late Wednesday, Chrysler announced it will shut down production at all plants for a month. GM and Ford have also said they will extend their usual seasonal shut-down. GM and Chrysler made it clear in testimony earlier this month, they can not survive much past the end of the year without a financial lifeline.
The Bush Administration has said a "disorderly bankruptcy" would be harmful to the economy and is not an option. But it feels like we are getting awfully close to that. GM has denied news reports that it is in merger talks with Chrysler, but at this rate it is hard to see how all three carmakers are going to survive this crisis in the current form.
The idea of naming a car czar to oversee the restructuring process also seems to have stalled. The New York Times is reporting that Treasury Secretary Henry Paulson has effectively taken on the role of "auto czar." That's alarming to many who are critical of his handling of the bank bailout.
Our CNNMoney.com folks report that Speaker of the House Nancy Pelosi wants Paul Volker to take over the role. A former Fed chairman and advisor to President-elect Obama, Volker knows a lot of monetary policy, but few believe he has the corporate experience or turn-around skills needed to make a real difference to the auto industry.
The White House says they are getting close to announcing some kind of plan, but I wonder ... have we passed the point of no return? Is it too late to save all three of these car companies?
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