Thursday, December 18, 2008
What about Ford? Suppose GM and Chrysler are bailed out but Ford isn't (because it's not doing that badly and doesn't need a bailout to survive).
Brian Faughnan argues that's good for Ford, because GM and Chrysler (if the latter still exists) will be under the thumb of the "car czar" and Congress--and therefore under pressure to reduce their profitable truck and SUV business "in favor of the green cars that Obama, Pelosi, Reid, and Barney Frank regard as the wave of the future."
Actually, I don't know enough to know which side is right. Ford might be able to negotiate UAW concessions on its own--but that would presumably be harder without the potential hammer of bankruptcy. Mainly, the question highlights how complicated this industrial policy business is when you're bailing out competitors . Is hurting Ford one part of the plan to aid GM and Chrysler? Would holding Ford harmless (somehow) make saving the other two more difficult and costly? A prepackaged bankruptcy that gets the government out of making these decisions--with attendant well-padded influence-peddling on all sides--looks increasingly appealing. ...