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Essay / Auto Industry Crisis Case Study - 1083
Some also saw that Chapter 11 would cause more problems instead of solving them. In promoting a government-facilitated solution, the Brookings Institution argued that the Big Three make automobiles that few Americans want to buy. This problem, if it turns out to be a problem, would not be solved by Chapter 11 bankruptcy focused on cost considerations like wages and benefits. Their strategy would allow the company to better organize the factory and human resources by transferring or selling the assets of the Big Three to other companies. Another idea that could have contributed to the bankruptcy would have been a merger between one or more of the Big Three. This would have enabled savings and a focus on the most profitable brands. Unfortunately, the United Auto Workers opposed this decision because it would have resulted in layoffs. The Big Three were considering bankruptcy because they were having trouble paying their employees the salaries they had planned.