THE BIG THREE BAILOUT
The big three automakers want a bailout! What's this all about? Reviewing some of the events of the last few weeks, I see the following:

1) GM,Chrysler and Ford have all managed to work themselves into a deplorable financial position. GM and Chrysler are in such bad shape, that they claimed they might have to file for bankruptcy by January 1st. Ford, though hurting, is in far better health and can manage for up to a year without direct government help.
2) Why shouldn't GM and Chrysler be allowed (or even encouraged) to go into bankruptcy(Chapter 11) just like any other failing corporation? There is a fairly large body of thought that they SHOULD be allowed to do just that. In fact polls consistently find nearly 60% of Americans support bankruptcy as the best option for them. But politically it is seen as too much of a risk to an already shaky, fragile economy. The UAW and GM/Chrysler management have worked frantically to get us to believe "the sky is failling" theory of bankruptcy. They totally ignore the examples of United Airlines, USAir, Delta, Northwest and Chrysler (of all things!)
3) But lets face reality here. Ch 11 is designed to allow the company to reorganize - debt, contracts, Union contracts, wages, work rules etc, and of course, all of these stakeholders are threatened by this, because in one way or another, they are all going to have to give up "a lot!" So what are the options?
The Senate felt they could work out all the steps that would result in a reorganized company without going into Ch.11. There were a large number of Senators (both Dems and Reps) adamantly against the Congress getting involved in any way at all. But, there was also a substantial number of Senators determined to craft a workable program. As one Republican Senator said, "we were within six minutes" of getting a deal approved. Then the UAW took a calculated risk: they rejected the plan because it would have resulted in substantially lower wages and benefits and much less onerous work rules. They gambled that once a new President entered the White House, all bets would be off and they could exert enough pressure on Obama to cut a much better deal for their membership.
So the Republicans walked away from the deal, as well they should have. The UAW has mugged the Big Three for 70 years, and this action was in perfect harmony with their long established modus operandi. Negotiation paired with blackmail had always worked before, so why not now?

The Republicans, for once, can be proud of their efforts to get this plan done quickly, but they can be equally proud of walking away from another UAW mugging.

Now, President Bush has stepped in and released sufficient funds to get GM and Chrysler through the next 2-3 months. This was done with the clear understanding that all the parties would agree on a restructuring(ala Ch.11 criteria) by March 31st, and this WOULD INCLUDE THE UAW! Now, the ball is in Obama's court. Will he have the political courage to force GM and Chrysler to carry through this "Chapter 11 - like" reorganization, and to hell with the UAW! This is obviously going to be very interesting to watch, because it can define his entire Presidency.

4) As I see it, the GOP Senate came out a winner in all of this. President Bush came out a winner, as well. The UAW came out nakedly shown for what they really are - Union first, the companies and the country be damned!

5) Finally, the more I thought about this Auto Industry dilemma, the more I realized the arrogant and inept Auto Industry management really didn't deserve a huge bail out "'gift". Nor should the thugs at the UAW deserve to have their outrageous demands further validated. So, I do believe a package to get them past this current (alleged) crisis is acceptable, if, and only if, it is accompanied by a "complete" reorganization plan (as if in Chapter 11) that would be carried out in a period of 3-4 months.
My belief is this plan will result in a stronger US auto industry, albeit somewhat smaller. I see no reason whatsoever for Chrysler continuing in business. I would facilitate a pla that would devide Chrysler's product line (and assets) essentially in half: half to Ford and half to General Motors, with precious little payment to Chrysler's owners (Cerberus). Remember, Cerberus made it very clear that they didn't think Chrysler was a good enough risk to invest any more money, even though they had assets of over $30 billion! So one has to ask: why should the American tax payor invest in them? Chrysler's owners should get whatever percentage would have been associated with a Chapter 7 liquidation. This would probably be no more than 2-5 cents on the dollar.

Now, all of these steps would really result in a substantial restructuring of the U.S. Auto Industry!