Pres. Bush considers 'orderly bankruptcy' for autos

December 18, 2008 8:12:12 AM PST
The Bush administration is seriously considering "orderly" bankruptcy as a way of dealing with the desperately ailing U.S. auto industry. [CHECK THE MARKETS: Get the latest numbers from Wall Street]
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"The president is not going to allow a disorderly collapse of the companies," White House press secretary Dana Perino said Thursday. "A disorderly collapse would be something very chaotic that is a shock to the system."

But, she added, "There's an orderly way to do bankruptcies that provides for more of a soft landing. I think that's what we would be talking about."

President George W. Bush, meanwhile, said he had not yet made up his mind what action to take.

Perino emphasized there were several approaches to assisting the automakers, such as short-term loans out of a $700 billion Wall Street rescue fund. Bush has opposed this approach before, and it is adamantly opposed by many Republicans.

"It's in the spectrum of options and there are a lot of options," Perino said.

She said one of the factors delaying an announcement on an auto rescue plan is the continuing discussion between the administration and the various stakeholders who would have to sign on to a managed bankruptcy -- entities such as labor unions and equity holders in addition to the companies themselves.

"That is one of the considerations that we're taking into account," Perino said. "In any scenario that comes forward after this decision-making process, all those stakeholders are going to have to make tough decisions."

The presidential spokeswoman would not put a timetable on when an announcement would come, and suggested it may not happen this week. But it is not an option to do nothing, she said.

"If you thought that our economy today could handle the collapse of the American auto industry, then you might come to the conclusion that doing nothing was an option," Perino said. "We're going to do something."

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