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Bush considering "orderly" auto bankruptcy
5 hours ago

WASHINGTON (AP) — The Bush administration is seriously considering "orderly" bankruptcy as a way of dealing with the desperately ailing U.S. auto industry.

White House press secretary Dana Perino said Thursday, "There's an orderly way to do bankruptcies that provides for more of a soft landing. I think that's what we would be talking about."

President George W. Bush, asked about an auto rescue plan during an appearance before a private group, said he hadn't decided what he would do.

But he, like Perino, spoke of the idea of bankruptcies organized by the federal government as a possible way to go.

"Under normal circumstances, no question bankruptcy court is the best way to work through credit and debt and restructuring," he said. "These aren't normal circumstances. That's the problem."

At the White House, Perino said, "The president is not going to allow a disorderly collapse of the companies. A disorderly collapse would be something very chaotic that is a shock to the system."

She said the White House was close to a decision and emphasized there were still several possible approaches to assisting the automakers, such as short-term loans out of a $700 billion Wall Street rescue fund. Bush has resisted this approach before, and it is adamantly opposed by many Republicans.

"It's in the spectrum of options and there are a lot of options," Perino said.

She said one of the factors delaying an announcement on an auto rescue plan is the continuing discussion between the administration and the various sides that would have to sign on to a managed bankruptcy — entities such as labor unions and equity holders in addition to the companies themselves.

"In any scenario that comes forward after this decision-making process, all those stakeholders are going to have to make tough decisions," she said.

The presidential spokeswoman would not put a timetable on when an announcement would come, and suggested it may not happen this week. But something must be done, she said.

"If you thought that our economy today could handle the collapse of the American auto industry, then you might come to the conclusion that doing nothing was an option," Perino said. "We're going to do something."

Bush was speaking to the American Enterprise Institute, a conservative Washington think tank.