I think that Brooks has it wrong this time. I agree that GM cannot restructure itself out of its current situation. I agree that the Bush administration punted. I agree that they should have — there needed to be preparation for the imminent bankruptcy. I also disagree that this one has to remain a political football with Congress or the administration micromanaging GM’s bankruptcy process. The administration needs to turf this to a real bankruptcy process and then get out of the way. At the end of the line, it’s a fight between the financial stakeholders, not the politicians. Throw the bondholders, unions, dealerships and other creditors into the pit (atop the corpse of shareholder equity) and see how it works out.
For 30 years, G.M. has been restructuring itself toward long-term viability. For all these years, G.M.’s market share has endured a long, steady slide…When the economy cratered last fall, the professionals at G.M. went into Super-Duper Restructuring Overdrive… The Bush advisers decided in December that bankruptcy without preparation would be a disaster. They decided what all administrations decide — that the best time for a bankruptcy filing is a few months from now, and it always will be…Today, G.M. and Chrysler have once again come up with restructuring plans…But this, President Obama declares, is G.M.’s last chance. Honestly. Really.No kidding…And yet by enmeshing the White House so deeply into G.M., Obama has increased the odds that March’s menacing threat will lead to June’s wobbly wiggle-out. The Obama administration and the Democratic Party are now completely implicated in the coming G.M. wreck…The Midwestern delegations, swing states all, will pull out all the stops to prevent plant foreclosures. Unions will be furious if the Obama-run company rips up the union contract… The most likely outcome, sad to say, is some semiserious restructuring plan, with or without court involvement, to be followed by long-term government intervention and backdoor subsidies forever…It would have been better to keep a distance from G.M. and prepare the region for a structured bankruptcy process. Instead, Obama leapt in. His intentions were good, but getting out with honor will require a ruthless tenacity that is beyond any living politician.