UAW Backs Away From GM, Chrysler

As if we couldn't see this coming.... http://www.cnbc.com//id/29198688

I have to side with the UAW on this one. Although that's a rather hollow endorsement because GM is in dire straits. If the UAW (and GM bondholders) stick to their guns and forces GM to honor previous commitments, things can and will probably get ugly - fast. President Obama may have to step in much like this CNBC article (via Reuters) states. The best option in that point would be bankruptcy in my opinion.

What would bankruptcy mean? Probably not as dire as GM portends it to be. For starters, consumers aren't buying cars now, so what difference does it make if GM files for Chapter 11? GM and Chrysler are concerned of course that the public won't buy from a bankrupt company. Not sure where they get that from - virtually every legacy airline has filed for bankruptcy, some multiple times - and the public still flies on those planes.

I'm sorry to say this to my friends in the automotive industry, but slow car sales didn't start this economic downturn and getting those sales back won't bring us out of this malaise. According to economists and those who watch these things carefully, the problem started with toxic mortgages and therefore the solution must be in addressing these mortgages the securities based on them. Solving the mess in Detroit does not meet that goal.

For the record - I drive two Chryslers.