[tholland]

Originally Posted by zete

This makes sense as it's not a typical bankruptcy. Instead, they can market it as government protection, which won't impact sales as much. The government would have to stand behind Detroit and indicate that they're backstopping them until they get things sorted out. That gives the perception that Detroit is safe and buying a car from the Big 3 is safe since the US government is in there with them.

Of course, the PR and marketing have to be spot on. They have to show themselves WITH Obama as many times as possible and use words like "Thank you for saving Detroit". The "b" word should never be uttered publicly so as not to confuse the easily confused public.

I think the "b" word factor is already in play... so the scenario you described might be the best course of action. It could allow GM to realize the union cost savings now rather than later to speed up the turn around. I would add that GMAC should be given access to the TARP as long as they use an appropriate percentage for new auto loans/leases.

The only problem is, what effect would this have on a struggling supplier? Any disruption it would cause would likely have a shockwave effect, so you would have to protect the supply chain and possibly the dealers too... any stress on the dependants will hurt the host.