Business: Big Loss, Bigger Bailout

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The fear is that this could foster an attitude among managers that they need not work very hard at holding down costs, increasing sales and developing new products, since Washington will be reluctant to let failing companies fail. That is an attitude that has been pervasive in Britain, where governments have been all too ready to nationalize or shore up shaky enterprises. In fact, Chrysler got a $270 million handout in Britain in 1976 after it threatened to abandon its money-losing manufacturing operations there. Two years later, the company pulled out of Britain anyway. Indeed, that episode may have an important moral: loan guarantees or no, only Chrysler can save Chrysler.