WASHINGTON — The Bush administration is looking at "orderly" bankruptcy as a possible way to deal with the ailing U.S. auto industry, the White House said Thursday as carmakers prepared more plant closings and a half million Americans filed new jobless claims.
With General Motors, Chrysler and the rest of Detroit anxiously waiting for a federal rescue, White House press secretary Dana Perino said: "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."
Never miss a local story.
President Bush, when asked about an auto bailout, said he hadn't decided what he would do but didn't want to leave a mess for Barack Obama, who takes office a month from Saturday.
Bush, like Perino, spoke of the idea of bankruptcies orchestrated by the federal government as a possible way to go — without committing to it.
"Under normal circumstances, no question, bankruptcy court is the best way to work through credit and debt and restructuring," he said during a speech and question-and-answer session at the American Enterprise Institute, a conservative Washington think tank. "These aren't normal circumstances. That's the problem."
Perino said the White House was "very close" to a decision — though she wouldn't give a timetable. She emphasized there were still several possible approaches to assisting the automakers, including short-term loans from the Treasury Department's $700 billion Wall Street bailout program.
The Big Three automakers said anew that bankruptcy wasn't the answer, as did an official of the United Auto Workers, who called the idea unworkable and even dangerous.
GM said a report that it and Chrysler had restarted talks to combine was untrue.
Alan Reuther, the United Auto Workers' legislative director, said the union urged the administration during a meeting this week to follow the provisions included in the House-passed auto aid bill.
Congressional aides in both parties who have been closely following the discussions suggested the talk of bankruptcy could be a tactic to extract more hefty concessions from the companies and union in exchange for granting short-term loans from Treasury's financial industry rescue fund.