Auto Bailout

Bush is going to release TARP money for GM and Chrysler.  The terms are actually pretty good for the taxpayer and it appears that the conditions set for receiving the money are similar to what would occur in a Chapter 11 Bankruptcy:

"—Reduce debts by 2/3 via a debt for equity exchange. 
—Make one-half of VEBA payments in the form of stock. 
—Eliminate the jobs bank. 
—Work rules that are competitive with transplant auto manufacturers by 12/31/09. 
—Wages that are competitive with those of transplant auto manufacturers by 12/31/09."

This is probably better than the unions would have gotten in a bankruptcy in so far as it requires the automakers to pay into the VEBA fund (as a result of contract negotiations between the unions and the automakers last year health care benefits for retirees were taken over by the unions but the automakers had to make significant one time contributions to the health care trust fund- VEBA).  I am guessing in a bankruptcy proceeding the judge would tell the unions that there is a neat thing callled medicare and to go enroll.  So this is maybe a little more even handed.