Sen. Shelby favors bankruptcy instead of bailout money

The top Senate Banking Committee Republican says nothing will turn around the troubled U.S. auto industry until its top management is ousted and the manufacturing model overhauled.

By: Associated Press | Alabama's13.com
Published: November 19, 2008

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WASHINGTON (AP) - The top Senate Banking Committee Republican says nothing will turn around the troubled U.S. auto industry until its top management is ousted and the manufacturing model overhauled.

Sen. Richard Shelby of Alabama said Wednesday he didn't think providing $25 billion in emergency loans to Detroit would do the jobs, calling that a "life support" option.

Shelby said on CBS's "The Early Show" that he believes filing for bankruptcy might be the better choice. He said: "I don't think they have immediate plans to change their model, which is a model of failure."

Rep. Barney Frank, a Massachusetts Democrat who heads the House Financial Services Committee, said he didn't think filing for bankruptcy would be a good strategy. He noted that such a move would likely mean that contracts with organized labor would have to be broken, saying "we already have too much union busting."