The administration and some congressional Republicans still don't get it.  Although strongly rebuked at the polls on November 4th, largely for mixing their message and setting aside long-standing free-market principles, they are pushing a back-door scheme to bailout the Big Three.  Rather than providing money from the TARP program (not a good idea), as the Democrats favor, they would instead reallocate $25 billion from previously passed legislation aimed at supporting the production of green vehicles.  However you slice it, it's still public money to support a failed or failing business model. 

I do not take lightly the loss of jobs that will likely ensue from one or more bankruptcies among the Big Three and their suppliers and dealers, but the only rational way to protect the U.S. auto makers (and their workers) and put them on a path to long-term viability is to address the untenable legacy costs that are an albatross around the industry.  It simply isn't practical to expect those issues to be resolved without a restructuring process enabled by Chapter 11 bankruptcy protection—existing contracts and state law make it near impossible.

The labor cost imbalance issue is pretty well understood, so I won't readdress it here (see a previous post titled, Car Wreck).  What isn't as widely known are many of the other inefficiencies baked into the Big Three cake.  For example, consider that GM and Toyota produce roughly the same number of vehicles globally.  Unfortunately, GM sells those vehicles through over 7,000 dealerships; whereas, Toyota only needs about 1,200.  Gross and debilitating inefficiency.  Additionally, the law in many states makes it virtually impossible for a manufacturer to close a dealership.  So, as distasteful and disruptive as it may be, the best medicine is to allow bankruptcy and reorganization, and work toward a business model that is sustainable and will provide good, stable jobs in perpetuity.  That's  what's best for American workers and the overall economy.