Senate drops GM & Chrysler bailout bill

PHOTO: US Capitol Building

(Updated below)

From the NY Times:

The Senate on Thursday night abandoned efforts to fashion a government rescue of the American automobile industry, as Senate Republicans refused to support a bill endorsed by the White House and Congressional Democrats.

This could very likely mean that GM and Chrysler will soon go bankrupt. This will likely mean a lot of lost jobs at a time when the overall job market is in a freefall. Not good for the people in and around Michigan. Let’s hope the shockwaves don’t bring down Ford.

The bailout bill may very well have deserved to die, I’m not familiar enough with the details to make a definitive judgment. Keeping GM and Chrysler alive as a Public Works type job program makes some sense. Giving them a bunch of money while they shed jobs restructuring made less sense given they could have done that under bankruptcy.

In any case, this decision shouldn’t have been made by lameduck politicians on either side of the aisle. Why should it take nearly three months for the new Congress and President to take office? Shouldn’t they be ready On Day One?

Update
The White House and the Treasury are thinking of using money already appropriated for the Wall Street bailout on GM and Chrysler.

Flickr photo by vgm8383

3 Comments

  1. Ian

    I don’t know how to feel about it. I’m sick of the bailouts at this point. The numbers are just staggering and it feels too much like throwing money at a problem and hoping it just goes away. Companies like AIG continue to have their executive retreats where they spend lavishly and call it “essential” to their work. Its not like the big three will vanish if they declare bankruptcy. I don’t know, its probably just a question of do we want short term pain (bankruptcy) or long drawn out pain (bailout and recovery). Either way it sucks.

  2. Diane

    WHy are the lowly workers being asked to give up so much while the CEO’s of companies were not asked to do anything.

    This appears to be a class difference to me.

    I think the republicans have a lot to answer for.
    It’s obvious they don’t like unions, working class people and people that don’t think like them(OK that’s my own opinion)
    But why do they give tax breaks to the wealthy, 7 billion to the banks, finance company etc. No strings attached?
    But they can’t support the average American?

  3. Chris

    Diane,
    You make a good point. If you read up on the details of why the Senate Republicans shot down the GM + Chrysler bailout bill, you’ll find out that they wanted cuts to factory worker pay that would bring union salaries in line with non-union salaries.