2bz

Reasons to Bail Out GM

Bailing out the 3 is akin to keeping a terminally ill patient on life support. It cost the family a ton of money, but the final outcome remains certain regardless of the efforts.

Bankruptcy of the 3 is not equivalent to closing them down. It gives them an opportunity to clear their books of debt and start with a clean slate. Many airlines have done so and are still around today. We should however consider the impact on their suppliers. The ones with decent balance sheets (if there are any) will be the hardest hit in that they will have to swallow losses generated by the 3's defaults, but they may not yet be eligible for bankruptcy thus likely resulting in RIFs. The rotten ones will just go bust like the 3 and start from scratch under new ownership.