Bankruptcy

All I Can Say is That Car Companies Must Really Really Need the Money!

By J. Michael McBride

Two points about the car company bailout as it is presently proceeding. First, if the car companies are willing to accept a car czar from Washington who has real authority over the companies operations, then they must really need the bail out money. Second, there is once again a double standard in practice: one for the car companies and one for Wall Street.

“In sharp contrast to the relatively lax terms of the recent $700 billion bailout for the financial services industry, the auto rescue plan sets up a level of government oversight and control not seen since World War II. … If the draft legislation becomes law, it marks a dramatic move of the federal government into industrial policymaking. From railroads in the 19th century to huge investments in aerospace and computer technology in the 20th century, the US government has a history of investing in major industries as well as crisis intervention. "This goes all the way back to the founding of the nation," says Nancy Koehn, a business historian at Harvard Business School. What's distinctive about the proposed auto bailout is the degree of government involvement. "With the exception of World War II, I cannot recall another instance where government was going to step in and regulate issues such as executive compensation or the use of corporate jets," she adds. "It's not quite nationalization of our auto industry, but it's getting there," says Joan Claybrook, president of Public Citizen.”

Here is a link to the full story:
http://www.csmonitor.com/2008/1210/p01s04-usgn.html

Michael

Full post as published by Texas Lawyer Blog on December 09, 2008 (boomark / email).