Pelosi Attaches Conditions to Detroit Bailout

If this wasn't so serious, it would be funny. Nancy Pelosi confirmed yesterday that the House will take up a bailout package for the auto industry, subject to certain "requirements", including new fuel efficiency standards, production of advanced vehicles and restructuring to maintain long-term economic viability (think that last one is aimed at union concessions? - nah, I didn't think so either).

Interesting...part of the reason Detroit is in this mess is because of retooling costs required by new federal fuel efficiency standards and emissions regulations, and Washington's response is to tie economic aid to....new fuel efficiency standards, requiring further retooling costs.

I favor allowing the Big 3 to file for bankruptcy protection; it will enable them to still produce cars (perhaps a little wiser this time) while restructuring for long-term competitiveness. The airline industry has managed to do the same, and remain unconvinced that it's not a viable alternative this time around either.

Perhaps Washington's urgency in staving this off may have more to do with protecting union interests than with saving the industry itself. I think any part of a sound bankruptcy restructuring plan would examine the cost savings in shifting more production outside of the US, to cheap labor pools like Mexico, India and China - which would understandably make the UAW a little nervous.