The Demo Site

BIG THREE BAILOUT: NOW THE HARD BARGAINING BEGINS

The good news for the Detroit automakers is that they finally got part of the bridge loan they so desperately need. But if they thought getting the money was hard, now the hard part really begins.

General Motors and Chrysler face the tough task of having to bargain with all the stakeholders who must make sacrifices if these companies are going to truly restructure. And while they all may agree in principle that they have to give something up, they are going to fight like Hell to make sure everyone else gives up more than they do.

The problem with a bargaining situation like this is that if you have just one holdout the whole deal can fall apart. All it takes is one creditor to say that they want their bill paid in full, instead of taking something less than that, and then no one else will be willing to make any sacrifice.

And make no mistake about it, everyone's going to have to sacrifice: management, labor, creditors, bondholders, shareholders, dealers, and suppliers. It's going to be painful for everyone involved, but that's what it's going to take to save these two corporations.

John McElroy is host of the TV program "Autoline Detroit" and daily web video "Autoline Daily". Every week he brings his unique insights as an auto industry insider to Autoblog readers.