BY THE TIME Congress is finished with the Chrysler bail-out bill, the company may wish it had chosen a clean, simple bankruptcy instead. The House Banking Committee reported the bill last week embellished with a couple of amendments that are parodies of social intervention. This bill is evidently going to be loaded with everybody's pet projects for the corporate future -- with the result that this particular corporation will have less of a future than ever.
Chrysler has said that it will shut down one aged and obsolescent plant, Dodge Main, in the center of Detroit. Twenty thousand people once worked there; the number is now down to 2,600, and shortly there will be none. The Banking Committee wanted to do something for those people. When it voted the financial lifeline that is supposed to save Chrysler, it added the condition that Chrysler must share its guaranteed loans with any other company that might take over Dodge Main to build anything related to energy or transportation. It is hard to imagine a less useful compromise with reality.
The reality is that any enterprise moving into Dodge Main on government financing is going to be very far from a solid hope for a stable payroll. Losing a job is a frightening experience. But the Banking Committee is doing very little for those people still working at the plant when it strings them along with promises of an even less substantial successor to Chrysler.
This last-gasp attempt to revive an aging and decrepit factory cannot be reconciled with any flicker of concern for American productivity or efficiency or industrial ability to compete. The best interests of working people do not lie in expensive and doubtful attempts to shore up the least productive sectors of a company. Many of Chrysler's operations are highly competitive. What's needed is a reorganization that strengthens them. Instead, the congressional solution is merely to prevent any plant from closing -- down to the most unprofitable and least salvageable.
Even worse, the Banking Committee has added an employee stock option plan to the package. Chrysler would have to issue new stock and give one share to eomployees for every two that they buy. Can you imagine a more grotesquely misdirected attempt at social equity than requiring a floundering company to sell its stock to its employees -- and pressing the employees to buy it? If the company should ultimately fail despite the federal aid, some of these people will lose their jobs. Are they to lose their savings as well?
The Chrysler bail-out is beginning to run into serious opposition in the Senate. Quick passage no longer seems quite as certain as it did two months ago. That is fortunate, since the bill in its present form promises to do even less good, and even more damage, than the administration's original proposal.