On my drive home today, I heard one of Robert Reich's collegues at Berkeley (unfortunately, I missed the name) reinforce his point: if the Government is bailing out GM & Chrysler, then they should find a way to do it while preserving jobs! As an example, the speaker tried to draw a parallel with the Edsel! Specifically, that Edsel downsized itself out of business. While this is false, Edsel was produced by Ford, it's also a very poor atttempt at an analogy. The Edsel was a crappy car, if GM and Chrysler start producing crappy products, they too should cease to exist.
Let's perform a little "thought experiment". The hypothesis of the experiment is that GM and Chrysler can restructure successfully without downsizing their work force. A precondition for this hypothesis to be true would be that the current labor force from ALL their brands could be reorganized to produce higher quality, more reliable cars with designs that are profitable and competitive in the marketplace. Currently, GM & Chrysler are "main lining" cash from the Government! How much additional subsidizing do you think the tax payers will need to provide before GM & Chrysler accomplish such a reorganization? Let me give you a hint: it would take years!
A more pragmatic approach would be to keep the very best of GM & Chrysler, the most talented labor and the most successful models, and build a profitable company from those fundementals. Does anyone really think Pontiac can be made profitable in anything like the near term? Let's build GM & Chrysler from solid bedrock, not the shifting sand it's sitting on today.