Transcript: Sens. Chuck Schumer and John Cornyn

And George, the president has said -- you saw the contradictions there. He wants to get out of the business as quickly as possible. He also wants to urge the auto industry to move in the direction that he thinks is good for the country. And as of tomorrow, most likely or in a couple of months, once it's all completed, the United States government, along with Canada, will be a 70 percent owner of General Motors.

WILL: Yes. $20 billion in so far, perhaps $50 billion more to come. The president will be long into collecting Social Security before General Motors pays all this back, if it ever does, which I sincerely doubt.

Why are we doing this? We're doing this because it is too big to fail. First, big. Harley-Davidson has a market capitalization eight times larger than that of General Motors. In what sense is it big anymore?

Fail? A year ago, in the second quarter of 2008, it was losing $118,000 a minute. It has failed. The question is what you do about it. It seems to me the point of capitalism, which is a profit and loss system, is to clear away things like Chrysler and General Motors.

STEPHANOPOULOS: The White House would argue that they had to step in, because even though the numbers you cite are correct, they would say if GM goes into liquidation, 65,000 jobs lost immediately, hundreds of thousands of jobs lost in collateral damage.

WILL: That's partly assuming, partly assuming that Americans would stop buying American cars. They'd buy different cars, made in America, most of them, using American parts mostly, sold to America.

KRUGMAN: OK. I think it's kind of telling that you're talking about market cap. Of course, workers, not, you know, GM stock is essentially worthless, which we knew. But there are still a lot of workers there.

The thing is, we have a mechanism. Bankruptcy, Chapter 11. The problem is that the mechanism won't work in this case. That's been hashed over many, many times. The financial markets are still in disarray, so the kind of special financing that firms in bankruptcy get still won't be available unless the government stands behind it, and people won't buy durable goods -- automobiles -- from a company that they think has got only a few months to live.

So if you're going to do anything, you're going to have to have some kind of packaged bankruptcy that has a lot more English on the ball from the federal government than normal. That's what's happening here. This is not seizing the commanding heights. This is trying to sort of make bankruptcy work. Even odds that anything survives five years from now, but that seems like an option we're taking.

STEPHANOPOULOS: And even odds, let's dig into that a little bit more. The federal government drove a fairly hard bargain, we believe, with GM. The overall labor costs are down to about the prevailing labor costs in other parts of the industry. They've cut the number of brands down from eight to four. What will it take for GM to be a viable company in two years, as this plan envisions?

KRUGMAN: Well, first, auto sales have to come back up, which they probably will. Even if the economy has only a weak recovery, which is what most of us expect, the fact is, people are buying very few cars right now. At current takes, it would take something like 20 years...

(CROSSTALK)

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