Cassandra Watch: Fortune's Alex Taylor III Edition

Another scribe joins the elite squad of automotive analysts who’ve had their Road to Damascus moment re: GM’s inexorable slide into bankruptcy. Alex Taylor Three Sticks’ misFortunate conversion was inspired by the epic tomfoolery commonly known as the GM – Chrysler merger. Taylor warms-up by pre-spinning the General’s forthcoming pitch for a federal bailout. “A government loan wouldn’t be about protecting well-compensated union jobs or keeping afloat inefficient suppliers in Michigan and Ohio. It could be directed toward advancing Detroit’s and the country’s strategic interests by speeding development of alternative fuel technologies that reduce our dependence on foreign oil as well as help limit the generation of greenhouse gases.” Hang on; isn’t the rationale behind the current Department of Energy bailout loan program? Anyway, “GM may have a decent shot at that in a Democratic administration. If not, there is bankruptcy.” Da-da-DAAAAAA. OK, make the jump for Alex’ conclusion, his very own version of “Dr. Strangelove or How I Learned to Stop Worrying and Love a Cadillac CTS for 25 Grand.” [thanks to Polishdon for the link]

“Bankruptcy would give GM a chance to negotiate further cost reductions with its union workers, work out its obligations with those suppliers that are still solvent, and help speed the rationalization of its dealer body.

Would GM then be stigmatized as the only bankrupt auto company? No way. Ford ( F, Fortune 500) and Chrysler would immediately find that they have been made uncompetitive by GM’s actions and quickly follow it into Chapter 11.

Flying one bankrupt airline felt a little awkward, but by the time half a dozen were in the same condition, it seemed perfectly natural. That would apply to the Detroit Three. There is still an appetite out there in America’s heartland for Detroit iron, and in the end bankruptcy may be the best way to continue to satisfy it.”