Obama saved GM and Chrysler, Obama saved GM and Chrysler. Republicans wanted the companies to die quickly. That’s pretty much a central Democratic Party talking point this election cycle.
Of course, it’s complete nonsense. GM and Chrysler were “saved” by Obama with a bailout to preserve the position of auto unions. The companies could have survived just fine, and in fact better, had they filed for Chapter 11 like almost every major airline has done.
The latest example is American Airlines which filed Chapter 11 protection this morning when it could not get union concessions sufficient to make it competitive:
American Airlines parent AMR Corp. (AMR)filed for bankruptcy after failing to secure cost-cutting labor agreements and sitting out a round of mergers that dropped it from the world’s largest airline to No. 3 in the U.S.
With the filing, American became the final large U.S. full-fare airline to seek court protection from creditors. The Fort Worth, Texas-based company, which traces its roots to 1920s air-mail operations in the Midwest, listed $24.7 billion in assets and $29.6 billion in debt in Chapter 11 papers filed today inU.S. Bankruptcy Court in Manhattan.
“They will have to go through the whole process that their peers have gone through,” John Strickland, an aviation analyst at JLS Consulting in London, said today in a telephone interview. “It’s painful but probably necessary. They have fallen behind what others have done.”
American Airlines will emerge more competitive and in the long run will be better off. Just like GM and Chrysler could have done.