Removing the Splinter before it Grows into a Tree of a Problem

While the media is no longer focusing on the Big Three’s problems, their problems have not disappeared and until the CEOs of those companies probably handles them, they will continue to reappear as assuredly as the Clintons do in politics. So what should be done once it does recapture the media spotlight?

Rather than temporarily enabling the Big Three to continue perpetuating bad business practices through giving them government funds, they should be allowed to fail. By allowing them to reach the failing point, the Big Three would likely each declare chapter 11 bankruptcy. Heritage Foundation Expert Andrew Grossman explains that such a move would not result in their disappearance in the auto market. Rather the move would force the companies to seriously evaluate their business plans. This process would definitely not be easy, as it would require them cut some serious inefficiencies from their system and face some long ignored operational issues, such as the UAW.

Bankruptcy would give the Big Three a structured way to streamline their functions and deal with a current corporate structure that is unsustainable and unprofitable. It would break the UAW’s death grip on the auto companies. While union members would ultimately be receiving less in benefits than before, more workers would be assured long-term security at a fair market wage rather than the whole workforce eventually meeting unemployment when the Big Three collapse from the UAW unsustainable drain.Just like when someone gets a splinter in their finger, people typically have two options. They can confront the sharp pain and pull out the splinter. Or they can baby it, just hoping the pain will go away. In the former situation, the wound will heal and the pain is quickly alleviated. In the latter, the wound is allowed to feaster and ultimately, there is more pain endured. Bankruptcy is the first option. A government bailout is the second.

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