There are conflicting ideas on what should be done as the big three U.S. automakers head toward financial ruin. There are also some key things to note in making the decision of what to do as well as the political factors that play into the decision and the timing of the decision.

A couple leading economic analysts believe that Chapter 11 Restructuring is the way to go with the Federal Government providing the financial backing during the bankruptcy process. However, some economic analysts believe that this will only work if the bankruptcy judges go along with the companies plans of restructuring and that avoiding liquidation is not guaranteed and therefore would be a waste of government funding. Therefore, formulating a plan to avoid the bankruptcy process entirely must be done first.

So, what does that all mean? Well, liquidation for any or all of the big three (General Motors, Chrysler and Ford) means they will not exist anymore and everybody from the designers to the assembly line workers to the delivery truck drivers that take the cars to the dealers to the dealers and then the parts suppliers and repair shop employees lose their jobs.

Any plan at this stage to avoid bankruptcy seems to throw more money at the big three, which will only delay the problem and not fix it. The thought behind that is that they believe that auto sales will rebound eventually and the companies would then become self sufficient again. Where I agree slowing sales is making the problem more of a crisis, the problem isn't being addressed. We'll discuss the problem a bit later.

Sure, the bankruptcy plan to restructure could find a bankruptcy judge that rules the restructuring plan a failure and sends the company into liquidation, but that doesn't mean they all go into liquidation.

Now, let me say that where I don't approve of all of those employees losing their jobs and making an already stressed economy get hit hard with all of those freshly unemployed people, I also feel this is one of the key things to note when making the decision. It's not the federal government funding the companies during the restructuring process. It is all the tax payers being stressed farther in hard times.

As one of the tax payers that would be paying for the bailout, I'd like to now address the problem. First of all, the table at left shows the comparable cars for the manufacturers who have problem and a couple others that do not have problems.

Note, the two most distressed of the big three are Chevrolet and Chrysler (of which Dodge is a division) and their cars are priced higher than the competition. The reason for this is caused by the root problem that needs to be addressed. Let's not call it greed, that's not the word for it, but the problem we have to address comes from people demanding more than what was available and other people agreeing to the demand.

What the ... am I talking about? The United Auto Workers (UAW) union demanded a high dollar amount of healthcare and pensions be paid by the auto companies. Over the years, the number of employees that require healthcare and retirement pensions has been mounting up to be an expensive deal for the auto companies to expense. So, the profit generated by one car sale has dropped and therefore decreased the available funds to pay for the current and past employee expenses. As a result, the prices are higher as the companies try to cover their expenses. However, if you can buy a Toyota, Honda or Ford and get the same basic car size for less then the market share for the Chevrolet and Dodge drops as well as their income. Therefore, their profits continue to drop and you have a crisis developing.

So, will throwing more money at the problem solve it? No, it won't solve the problem. It is also thought as I stated above that parts suppliers and repair shops will be effected by the bankruptcy and liquidation of any or all of the big three. However, there are competing part suppliers out there that make parts for the current big three models. You can buy oil and air filters from Purolator and Fram as well as Motorcraft. So, if Ford went under, you'd still be able to change the filters in your car, but you wouldn't be able to buy a Motorcraft brand filter. And, if you couldn't buy a Ford, Chevrolet or Chrysler products anymore are you going to stop driving? Nope, you have to get to work. You're going to buy a Toyota, Honda, or another brand that is available.

In the long run, the other brands are going to need more help and more dealerships to handle their increased demand. So, the staff at these can come from the closed dealerships of the other brands.

I agree, it's not the best time from an economic stand point for this to happen, but if the economy was thriving and car sales were up this wouldn't be a considered a crisis right now. This could only happen during a struggling economy.

Now, the political side of the problem. It has been a long tradition of the unions of the country to donate to the Democratic party during elections. The union workers may not all vote Democrat, but it's the donations that create the loyalty of the Democrats in office to the Union management. That being said, George W. Bush is a Republican and on his way out of office. Meanwhile, the Congress and Senate are under the leadership of the Democrats and they aren't going to send anything that will be viewed as solving the problem to a Republican President to get the credit for signing. They're going to wait until President Elect Obama takes office so he can save the day and get a good start for his presidency. Most say that none of the big three are going under in the next few weeks.

There will be a bailout in the first half of 2009 authorized and signed by President Obama. By then, many different things will be said and revealed and so the contents of what happens next year can't yet be predicted. But, I assure you the plan will basically throw money at the problem and expect it to solve itself in time.

What is the solution? Some sort of bankruptcy, where if they are restructured to continue the deals of the past aren't continued to create such a high overhead cost and production of the cars and trucks supplied are cheaper to allow the company to survive during hard economic times. Much like those companies that are not presently in trouble.