The Bush administration is seriously considering “orderly” bankruptcy as a way of dealing with the desperately ailing U.S. auto industry.
“The president is not going to allow a disorderly collapse of the companies,” White House press secretary Dana Perino said Thursday. “A disorderly collapse would be something very chaotic that is a shock to the system.”
But, she added, “There’s an orderly way to do bankruptcies that provides for more of a soft landing. I think that’s what we would be talking about.”
It may not be clear what an “orderly bankruptcy” is, but it is already clear it won’t work:
She said one of the factors delaying an announcement on an auto rescue plan is the continuing discussion between the administration and the various stakeholders who would have to sign on to a managed bankruptcy — entities such as labor unions and equity holders in addition to the companies themselves.
The automakers can’t be saved without major union concessions, and the unions have already made it clear they won’t make them. If the unions have to sign on, this plan is dead even before arrival.
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