Commentary Magazine


Contentions

Too Big a Special Interest to Fail

This report tells us that the Obama administration is pushing G.M. toward a “surgical bankruptcy.” But then we get this tidbit:

President Obama, who was elected with strong backing from labor, remained concerned about potential risk to G.M.’s pension plan and wants to avoid harming workers, these people said.

So how exactly does this bankruptcy work? It doesn’t sound much like the standard-fare bankruptcy where an apolitical judge with the help of a referee cuts back the creditors, throws out the labor agreement, and constructs a reasonable contract enabling the company to return to profitability. Instead, the Obama administration is working hard — still — to get the bondholders to take a hit. It hopes to pre-set the terms of a “deal” rather than leave everyone, especially the union, to face the bankruptcy judge.

Maybe the stepped-up talk of bankruptcy will force the parties, including the UAW, to reach a deal. But so long as the president keeps sending signals that the UAW is too big to fail it is unlikely that the union will take the necessary steps to redo its labor agreement. Not until the administration sends an unequivocal message that the UAW needs to refashion its agreement — just as would be required in an ordinary bankruptcy — will there be hope for G.M.’s survival.


Join the discussion…

Are you a subscriber? Log in to comment »

Not a subscriber? Join the discussion today, subscribe to Commentary »





Welcome to Commentary Magazine.
We hope you enjoy your visit.
As a visitor to our site, you are allowed 8 free articles this month.
This is your first of 8 free articles.

If you are already a digital subscriber, log in here »

Print subscriber? For free access to the website and iPad, register here »

To subscribe, click here to see our subscription offers »

Please note this is an advertisement skip this ad
Clearly, you have a passion for ideas.
Subscribe today for unlimited digital access to the publication that shapes the minds of the people who shape our world.
Get for just
YOU HAVE READ OF 8 FREE ARTICLES THIS MONTH.
FOR JUST
YOU HAVE READ OF 8 FREE ARTICLES THIS MONTH.
FOR JUST
Welcome to Commentary Magazine.
We hope you enjoy your visit.
As a visitor, you are allowed 8 free articles.
This is your first article.
You have read of 8 free articles this month.
YOU HAVE READ 8 OF 8
FREE ARTICLES THIS MONTH.
for full access to
CommentaryMagazine.com
INCLUDES FULL ACCESS TO:
Digital subscriber?
Print subscriber? Get free access »
Call to subscribe: 1-800-829-6270
You can also subscribe
on your computer at
CommentaryMagazine.com.
LOG IN WITH YOUR
COMMENTARY MAGAZINE ID
Don't have a CommentaryMagazine.com log in?
CREATE A COMMENTARY
LOG IN ID
Enter you email address and password below. A confirmation email will be sent to the email address that you provide.