Romney vs. Granholm on Auto Bailouts

The big talking point on the pro-bailout side is that Chapter 11 is no an option because people won't purchase cars if they don't think their warranties will be honored, or they won't be able to get spare parts.

The latter part is simply stupid, as a lot of third-party companies already produce such spare parts, undercutting the the auto companies on price. (True, these companies themselves may also be in peril due to the UAW, but right-to-work state new entrants will spring up if they too fail.)

As to the former point, Romney suggest the government just guarantee the warranties should the companies go out of business -- an easy compromise, and not terribly expensive, given the alternatives.

But of course Jennifer Granholm invents some sort of goofy reason why that is unacceptable. (It has something to do with the "bond" people have, allegedly, with their automobile manufacturers.)

Granholm's real agenda is to avoid a necessary reality check being injected into the UAW's pay and legacy costs.

Thanks to William Amos.

posted by Ace at 06:21 PM

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