The Senate is not going to pass the Bailout Bill for the Automobile Manufacturers as the dispute over union worker pay could not be resolved. We have been saying for weeks that the unions need to have competitive wages with the foreign car companies but it is a little too late to demand it in the last hour. No bailout will mean a Chapter 11 bankruptcy for GM, Chrysler and maybe even Ford. There isn't enough time to reorganize with a prepackaged bankruptcy. We didn't want a bailout initially but the slow process undertaken by Congress has left GM with minimal liquidity and only a bankruptcy option. Such an event will mean massive unemployment, additional bankruptcies by auto suppliers, and a huge drag on the economy.
The stock market is going to tank in the morning and this recession will be even longer and deeper than we have been saying. The chances of a depression have just increased. The only hope to save the economy and global markets is for President-Elect Obama to call a meeting over the weekend where all relevant stakeholders of the auto industry and the Senate can sit down and resurrect a deal. If not, this country is in big trouble and liquidity will be at a premium. Hopefully, the Government can act responsibly and not let the economy spiral out of control.
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