Big Three's future still in balance
Plans for lengthy plant shutdowns hint at a turning point in automaker history.
The Detroit-based Big Three automakers – a foundation of American industrial might for a century – are going to be altered under any US government bailout. The question now may be only how profound those changes will be.Skip to next paragraph
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It's possible that the Bush administration still may offer a simple bridge loan to the desperate industry, postponing tough decisions until President-elect Obama takes office. But Bush officials ultimately could also decide on a rescue plan that puts the most troubled firms, General Motors and Chrysler, through something resembling a managed bankruptcy, according to administration officials.
Any federal offer of aid would come attached to more Washington oversight, via an "auto czar" or some other mechanism. That means Woodward Avenue, metro Detroit's main drag, in essence would then run through D.C.
Under the more involved plans under discussion, unions would have to make concessions, as would other stakeholders in the industry, such as bondholders. Plans would call for the number of dealerships to be trimmed.
Some suppliers are likely to go bankrupt, whether or not the United States provides the industry with aid.
As recent announcements of lengthy holiday plant shutdowns demonstrate, the industry has reached a turning point in its history. Ford has said it can shoulder along without US help. But GM and Chrysler can see a river from where they're standing, metaphorically speaking – the Rubicon.
The Big Three have long closed their US factories around the holidays. Typically, the seasonal shutdown lasts about two weeks.