In announcing Chrysler’s bankruptcy, President Obama shows other troubled firms and industries there’s a point where bailouts stop and hard choices begin—and that message must ring especially clear at General Motors, writes Tom Walsh for the Detroit Free Press. GM’s creditors will now be under a lot of pressure to accept what Obama’s auto task force suggests—for fear of getting a worse deal in bankruptcy court.
“A very loud warning shot has been fired,” Walsh writes. “And every stakeholder in GM … is scrambling to assess the implications.” Obama has also shown Detroit he’s going to be intimately involved in the ailing automakers’ businesses, which could horrify observers. “Some will gasp in dismay at this telltale sign that Obama is destroying the free enterprise system,” Walsh clucks. “But how different is, really, from Congress imposing Corporate Average Fuel Economy standards on the industry, as it has done for decades?”