Sixty-Six Oh Eight

It appears that without government aid General Motors will go bankrupt, and without further intervention the rest of Detroit’s big three, Chrysler and Ford, could follow suit.  The ripple effect from these bankruptcies would be massive, it is predicated that up to 1.2 million jobs could be lost.  It could also plunge the U.S. into an even deeper recession.  Obviously there needs to be some sort of intervention; but what is the proper course to take?
Both sides to the argument have very valid points.  On the one hand why should the United States government bail out companies that have refused to adopt, innovate, and keep up with industry standards?  Doesn’t this sort of action promote the attitude that American’s need to shake?  On the other side though are the potential consequences of not bailing out these companies, the loss jobs not only in the auto industry but in the industries they support like steel, the chance that the economy could get even worse, and the blow to the American spirit that the folding of this companies would be.  In this situation the only solution is to come to the center.
I strongly agree with the course of action proposed by New York Times columnist Thomas Friedman that was developed by former Detroit Bureau Chief Paul Ingrassia.
““In return for any direct government aid,” he wrote, “the board and the management [of G.M.] should go. Shareholders should lose their paltry remaining equity. And a government-appointed receiver — someone hard-nosed and nonpolitical — should have broad power to revamp G.M. with a viable business plan and return it to a private operation as soon as possible. That will mean tearing up existing contracts with unions, dealers and suppliers, closing some operations and selling others and downsizing the company … Giving G.M. a blank check — which the company and the United Auto Workers union badly want, and which Washington will be tempted to grant — would be an enormous mistake.”
I would add other conditions: Any car company that gets taxpayer money must demonstrate a plan for transforming every vehicle in its fleet to a hybrid-electric engine with flex-fuel capability, so its entire fleet can also run on next generation cellulosic ethanol. “”
Their plan is the exact courses of action that I would take, provide government aid, but with no frills and certainly not a blank check.  By essentially nationalizing the company it takes its potential negative effects on the market away and give the national economy along with the car companies time to recover and reengineer themselves for a successful future.
http://www.nytimes.com/2008/11/12/opinion/12friedman.html?emc=eta1