Steel Industry May Offer Automakers Restructuring Roadmap

AP (2/24, Lovering, Krisher) – "the plight of the Detroit automakers" is similar to that of the American steel industry "from 1998 through 2003," which "involved dozens of bankruptcies, huge job cuts and mill closures," and "steel's revival may provide a roadmap for a government team trying to save Chrysler LLC and General Motors Corp. ... Like steel before the shakeout, Detroit automakers are beset by foreign competition, high labor costs, a huge number of retirees and union work rules that place them at a competitive disadvantage to the Japanese." So far, unions and the automakers "have been taking steps to restructure, but they haven't done enough to erase the Japanese advantage." In the meantime, "the question remains whether Detroit automakers can be fixed without Chapter 11. Automakers want to avoid that, saying no one will buy a car from a company reorganizing under bankruptcy court protection." The AP points out, "Although U.S. Steel avoided bankruptcy, other steelmakers did not, and judges decided their fates. Hat tip: NAM