"Will fewer companies look to insource into America if the federal government is willing to bail out their domestic competitors?"

Here is a good point about the automakers bailout:

"Will fewer companies look to insource into America if the federal government is willing to bail out their domestic competitors?

The answer is an obvious yes. Ironically, proponents of a bailout say saving Detroit is necessary to protect the U.S. manufacturing base. But too many such bailouts could erode the number of manufacturers willing to invest here."

Hello. This is a product of a long list of poor decisions, both by the automakers and the government, and is only being considered because the Political Economy of the moment is drenched in fear and aversion to risk of any kind. It's more than a simple plan to aid an industry, workers, and region, although those surely figure in. The appearance of an arbitrary decision not to intervene, the wrenching numbers of displaced workers, and the resulting contagion of fear, which I'm beginning to realize is frightfully underestimated, are the additional reasons to bite the bullet here.

Of course, I've presented pretty harsh conditions, and the bailout should be structured as a government sponsored bankruptcy, but Political Economy encompasses more than a study of the economics of the current situation pertaining to the automakers. One can disagree, but to denude the issue of Political Economy is a serious analytic and real life mistake. Rather like the ones these quant fellows in the investment community made.

Any problem must be assessed in context, otherwise, it is impossible to understand. I believe that the automakers of the world will understand this decision, while using it as an opportunity to register their annoyance and, of course, promote their own cars.