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 Toyota (NYSE:TM), which just posted its first-ever operating loss in its history.
"The good ones will be there," Bethune said. "Toyota may be taking a hit today, but they're going to be back because they have good products and a good company and ultimately, we're going to buy a car again. So, maybe you don't have the confidence to buy a car today, but you're going to buy a car sometime. Which one are you going to buy?"
