Detroit's Sinking Fleet

The best option to handle the Big Three would probably be for the federal government to negotiate serious concessions in return for some type of bailout. Those concessions would include major environmental advances (higher fuel economy, recyclability of vehicles, intensified research, possibly obligations to pursue other transportation priorities like electric streetcars), new management (preferably a combination of private equity managers, venture capitalists, and engineers), a non-voting equity stake for the government, renegotiation of the union contract to bring their wages down to market-competitive levels (along the lines of Reagan's negotiation with the air traffic controllers' union). Bankruptcy would cause major defections to other automakers to avoid the risk of owning a car made by a defunct company (which would kill resale value and increase repair costs). Bankruptcy would be a circle sufficiently vicious to kill off at least one or two of them. This would accelerate and perpetuate the recession to little positive purpose.