I think we can safely say that GM is going into bankruptcy.
The Treasury Department is directing General Motors to lay the groundwork for a bankruptcy filing by a June 1 deadline, despite G.M.’s public contention that it could still reorganize outside court, people with knowledge of the plans said during the weekend.
Members of President Obama’s automotive task force spent last week in meetings and on conference calls with G.M. officials and its advisers in Detroit and Washington. Those talks are expected to continue this week.
The goal is to prepare for a fast “surgical” bankruptcy, the people who had been briefed on the plans said. G.M., which has been granted $13.4 billion in federal aid, insists that a quick restructuring is necessary so its image and sales are not damaged permanently.
The idea, essentially, is to create the GM version of a "bad bank" and a "good bank," with the decent brands quickly spun out of bankruptcy (within two weeks) and into a new organization. The bonholders won't budget, surmising that they would get a better deal in bankruptcy court, so we're looking at a done deal. And it'll be pricey.
The rest of G.M. may require as much as $70 billion in government financing, and possibly more to resolve the health care obligations and the liquidation of the factories, according to legal experts and federal officials.
To say nothing of how many jobs this would cost.
Once again I will ask why we cannot put auto assembly lines to work making high speed rail cars and mass transit vehicles under grants through the current Recovery Act.