Spencer Abraham

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Many commentators and members of Congress have declared that the best hope for the Big Three auto companies is to declare bankruptcy. Airlines have gone through bankruptcy and adjusted, after all, so why can’t carmakers?

This comparison is appealing, but flawed. Almost every carmaker that has ever gone bankrupt has disappeared for good. And there is no reason to believe the Big Three would not do the same. Chapter 11 filing would almost surely lead to liquidation.

Just as financial institutions depend on the confidence of those with whom they do business (as Bear Stearns and Lehman Brothers discovered), automakers depend on the confidence of car buyers.…  Seguir leyendo »