C’mon. Let’s all take a minute to catch our breath. There’s way too much hyperventilating going on.
I myself have been torn through this process. My day job is tied directly to the automotive industry, and although my background and attitudes are firmly on the side of free-market laissez-faire economics, a part of me has secretly been pulling for the loan package to be approved. Because it would be easier.
Because it would be easier.
If ever there was something that explained society today in the US it’s that. We want ease. We want simple. We want Judge-Judy type scenarios where everything gets decided pretty neatly for us in a half hour.
We don’t want long and difficult transitions. And we certainly don’t want pain.
But with Ron Gettlefinger’s inexplicable decision yesterday to reject the notion of any more concessions – kind of like a man on the deck of the sinking titanic thinking that he is still in control of his destiny – all we have left to look forward to is a difficult transition. And probably lots of pain.
But now that the notion of a loan package looks like it’s dead, and with it the “easy way out”. Can we finally talk turkey? Can we take the gloves off and talk truth and not hyperbole?
And truth is this – that bankruptcy IS the way to ensure the survival of this industry into the future. Period. Let’s face it – the bridge loan packages were simply stopgap measures to buy them more time to restructure. But these companies need a massive restructuring focused on slashing hourly labor and retiree costs though, and the ONLY way to do that is through a bankruptcy action.
You need look no further than the UAW’s action yesterday to see why bankruptcy is necessary. After all these years the UAW still doesn’t get it. And because of that I don’t believe for one second that any restructuring action without bankruptcy would have been successful. And so while the bridge loan scenario would have been easy, it would also have started the final death spiral for the manufacturers, and probably for this area.
So now that it looks like we’re heading down that path, can we stop all the chicken-little talk about nobody buying from a bankrupt company? It made for a nice, visible, and dramatic argument when we were looking for the easy way out. But the fact is, it’s simply not true.
In fact, I propose that we stop talking about bankruptcy completely. It’s unproductive. And it sends the wrong message.
All of us in this area have a huge vested interest in this RESTRUCTURING of the automotive industry. And through this RESTRUCTURING this area will bounce back stronger than before. We have always bounced back. And I’m confident that we will again this time.
And I’m putting my money where my mouth is – I’m closing on the purchase of another investment property this afternoon, and I have three more that I’m looking at.
So let’s use all of our considerable communication powers and channels to talk about all the great things that are going to come out of this RESTRUCTURING. The pain is now going to happen no matter what.
It’s up to us to choose how to react to it.