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The Bankrupt Future of the Auto Industry

So now we're hearing that Obama doesn't think bankruptcy can be avoided by the auto firms, and no wonder--March brought yet another round of abysmal numbers on auto sales, both here and in Japan.  A car purchase is simply too easy to delay, especially with credit constrained for the bottom 30% or so of the market.

If Obama follows through, and actually puts the companies into bankruptcy, I'll be awfully impressed--it's hard for any president to give up Michigan, but especially for a Democrat who wants labor support.  So then the question is, what next?  Which marques go?  Buick, for sure, and Pontiac.  Which plants close?  And what is the government going to do to help autoworkers?  They're not just out of a job--they're stuck in a state that will be absolutely devastated by these closures.  Their houses will be worth almost nothing.  What do you do with a 50-year-old auto worker who has lived in a factory town all his life?


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Megan McArdle is a columnist at Bloomberg View and a former senior editor at The Atlantic. Her new book is The Up Side of Down.

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