Shhhh. All this talk about bankruptcy is hurting Detroit's automakers.
If we don't talk about it, maybe it will go away.
It's "unhealthy," says Gov. Jennifer Granholm. Quit talking about it, for crying out loud.
As if happy talk or dancing around the elephant will make it disappear.
It won't and it's na´ve to think that consumers are staying away from Detroit's automakers because people keep talking about bankruptcy. They're staying away from showrooms because they can't get credit and because they're worried about their jobs -- particularly in Michigan, which reported a 12.6 percent March unemployment rate on Wednesday.
Obama leads the charge
In fact, it's Granholm's guy in Washington who is leading the bankruptcy parade. President Barack Obama ramped up that rhetoric (only it's real) when he said the viability plans for General Motors Corp. and Chrysler LLC were worthy only of the recycling pile. It is the Team Obama auto task force that has put Chrysler on a week-to-week death watch and extended GM's lifeline a little longer.
After that, it's a "surgical" bankruptcy. Quick and easy. Painless, even, some are suggesting.
I'm not sure what they're smoking, but the bankruptcy lawyers and the auto executives I've talked to laugh at the notion that these companies could get in and out of court in as little as two weeks, especially when the doctors are using butter knives for the procedure.
And particularly because it seems that neither the debt holders nor the United Auto Workers are willing to budge until the government tells them what to do -- a far more dangerous tactic if you ask me.
Chap. 11 mindset
In reality, GM, Chrysler and Ford Motor Co. have been in bankruptcy for the past year. They've been cutting costs, restructuring contracts and eliminating overhead at a staggering rate.
Ford hasn't fallen as far or as hard, but the company still is losing money at an alarming rate and its sales have plummeted with the rest of the industry. The Dearborn automaker, however, smartly got financing before the market crashed and has slickly capitalized on its competitors' problems.
And it has beaten GM and Chrysler to the restructuring game, another benefit of not being beholden to the government.
More cuts are coming and the uncertainty swirling around the industry isn't going away anytime soon.
There's something to be said about moving beyond the obvious -- these firms are already operating as if they're in court and that the trustee for GM and Chrysler is sitting in the White House. Unfortunately, that's the track they've taken.
Bankruptcy still is an option, and a real one at that.
None of this happened overnight but none of it will go away either by changing the subject.