Re-tooling Rules

Governments should step in to assist companies with retooling costs when it is a matter of strategic national interest. It was such a matter when auto makers become plane makers in World War II, and it well may be as SUV makers become Hybrid car and Train makers as we wean ourselves from oil imports and begin to fight climate change.

But let's be clear: this can't mean adding tooling --- it must mean re-tooling; tightly defined as the direct replacement of defunct lines and processes and the removal of related carrying costs. So it must not cover losses incurred from past poor management decisions. The mechanism for shedding these costs is clear and legal: it is Chapter 11.

So here's the order that we must follow:

1.) GM files for bankruptcy to shed its legacy costs and weak leadership
2.) The feds work with GM's new leadership to develop a real plan for lower energy transportation, and to agree on technologies and specific timeframes
3.) Re-tooling costs are shared -- with public monies treated as a capital infusion in return for equity.

The clear consequence is that retired auto workers are going to lose pensions and health care, and current workers may not have a place. Let's tackle issue one at a time. But let's also be honest:

Given where we are, it would be a terrible mistake to use the government to prop up obsolete production lines that are, in effect, counter to our strategic national interest. No American should play a role in the production of a gas guzzler, ever again.