Who should fix GM and Chrysler?
President Obama, and former President Bush, should have let General Motors and Chrysler go bankrupt, said The Wall Street Journal in an editorial. Obama is talking tougher, but it was a mistake for him to give the big automakers more time. "From now on, GM and Chrysler are Mr. Obama's companies, and taxpayers should hold him accountable for every dollar they are forced to spend to save jobs for the UAW and to make cars that Americans don't necessarily want."
"Obama struck an acceptable compromise," said The New York Times in an editorial. Instead of letting GM and Chrysler go bankrupt right away, or "giving them tens of billions of dollars more while hoping for the best," he decided to keep them afloat while seeing if they could hammer out plans to save themselves. "Now that the government is in control," it can make sure the companies stay on the right path.
It would be better to force the companies' stakeholders— bondholders, unions, stock holders—to make the tough decisions, said the Los Angeles Times in an editorial. They've resisted at every step, so it's pointless to grant GM a "do-over" to write a better recovery plan, and to give Chrysler time to sign an acceptable merger with Italy's Fiat. In bankruptcy court, the stakeholders would be forced to hash out a solution.
Bankruptcy is no cure-all, said Richard Cohen in The Washington Post. "It slows things down," which is something the industry needs to do if it is to save itself. It could hurt the economy, sure, "but bankruptcy acknowledges a reality -- GM and Chrysler are broke. I wish them luck -- but no more of my money."