Informed Speculation

…given how frequently I’ve blogged on it.

Obviously, I’m very pleased.  The Bush administration did the right thing, they did not force a Chapter 11, and their terms are fairly tough (although some of the more onerous measures are ‘targets’, rather than binding).  Still, it’s clear that this is hardly a no-strings giveaway.

Does this in and of itself get the Big 3 out of the bankruptcy risk zone?  No, of course not.  GMAC has to start lending again, and demand has to improve, and a hell of a lot of restructuring has to take place (speaking of GMAC, my only disappointment with the Bush plan is that it didn’t specifically address GMAC).  There will be wage cuts, layoffs, factory closings, debt swaps, and all sorts of pain.

And at the end of the day, it still may not work.

It does give a little bit of breathing room to the auto companies, though, and more than anything, that’s what they need right now…