I am very supportive of the American auto industry, I've only owned American cars. I think their quality is better than their reputation. However, I am wary of an auto bailout. An auto bailout is a union bailout.
The reason that US auto makers are not competitive and their quality lags is that the UAW has had a strangehold on the auto makers. Union imposed costs and regulation have made the auto makers uncompetitive. They have selectively increased costs to GM and Ford, but Honda and Toyota are not subject to their agreements. That means Honda and Toyota can not only make cars for cheaper, they can cut wasteful spending and improve production processes. Toyota's manufacturing system is world reknown. GM couldn't even think about replicating it because the union contract would stipulate that X number of worker are required to do a certain job.
A bailout won't make GM more competitive. It'll buy them some more time. 3 years later, they'll need bailing out again. Let them go into Chapter 11 and break the union contracts. Emerge a stronger company. Delta did. So can GM.
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