NYT editorial: So Far So Good

Less than three weeks after Chrysler filed for bankruptcy protection, it looks as if the Obama administration will pull off its goal of completing the carmaker’s restructuring by June, allowing it to emerge as a smaller, more viable contender in the global auto market.

Unfortunately, Detroit’s problems — and the White House’s — don’t end there. Still looming is the fate of General Motors, a much larger and more complex company than Chrysler. G.M.’s bankruptcy is becoming increasingly likely as its bondholders refuse to accept the government’s terms for a restructuring out of court.

Even if G.M. — with a lot of help — manages to survive bankruptcy, it has yet to show that it has a solution for one of its most fundamental problems: its inability to make cars that consumers want to drive. This is the government’s problem too. Under a plan being negotiated by General Motors and the Treasury, the government would swap some of its loans for a stake of at least 50 percent.

So far, it looks as if Chrysler will emerge from its restructuring a more sensible company, linked up to Italy’s Fiat, which knows how to manufacture and sell fuel-efficient cars. The deal, which could give Fiat up to 51 percent of Chrysler, was designed under the eye of the government to increase Chrysler’s sales overseas and get Fiat to develop fuel-efficient vehicles in the United States by 2013.

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