Former Continental Airlines CEO: What Makes the Automakers 'Exempt from Reality?'
It’s special treatment for automakers, according to a former airline executive.
Gordon Bethune, the former CEO of Continental Airlines (NYSE:CAL), now a CNBC contributor, told CNBC’s “Squawk Box” on Dec. 19 the political process is being substituted for what otherwise should be a bankruptcy judge in determining the fate of the big three automakers.
“Wow, what makes them exempt from reality? What are the bankruptcy laws invented for?” Bethune asked. “I mean – if it works in airlines, works in steel – what’s the matter with these guys? Why not have a judge decide instead of the political process? And, you know – you get some fairness in the federal court, so there’s no excuse for this whole debacle I don’t think.”
Bethune is famous for saving a beleaguered Continental Airlines from near liquidation after it had filed for bankruptcy several times, giving him a different perspective on how to turnaround a failing corporation.
“The status quo is preferable to an unknown future and what a federal judge may kind of slice and dice you up to,” Bethune said. “Here’s – you know they got competitors, like a horse race, right? These guys got a 300-pound jockey on their butt. I don’t care how good of a car they make, that’s too damn heavy of a jockey. They got to clean it up and the only place they can do it fairly is in the courts.”
President Bush has gone forward with $17.4 billion in loans for auto companies, but Bethune says the bailout won’t work because of the political interests involved.
“[It’s] too political,” Bethune said. “You can’t do it because there is too many constituents that have a vested interest in the outcome. Let a federal judge cut it up on what makes these guys competitive again.”
Bethune told “Squawk Box” the strong will ultimately survive. He pointed to
“The good ones will be there,” Bethune said. “
