The GM Bankruptcy

The offer to GM's bondholders was even punier than the offer to Chrysler's. And the bondholders predictably rejected the offer. So off we go into another bankruptcy. Under the terms of the deal, the government would take a much higher stake than they did with Chrysler.

The latest plan for the troubled automaker, which is expected to file for bankruptcy by Monday, calls for the Treasury Department to receive about 70 percent of a restructured G.M.

Including the more than $20 billion that has already been spent to prop up G.M., the government will provide G.M. at least $50 billion to get the company through Chapter 11, people with direct knowledge of the situation said Tuesday. By some estimates in Detroit, tens of billions beyond that amount may be required.

The United Automobile Workers, meanwhile, will hold up to 20 percent through its retiree health care fund, and bondholders and other parties will get the remaining share. Shareholders would be virtually wiped out.

Because of the publicly traded nature of the company, this will be a long and complex bankruptcy filing, unlike Chrysler, which appears to be moving right along. The government would be a silent partner, hoping to sell their shares as soon as the carmaker gets back on its feet.

Taxpayers will have invested around $50 billion into GM before this is over. I'm trying to understand how this makes sense. That's a lot of money to put into the hopes of the Chevy Volt. Maybe you can see this as an extension of the stimulus, saving another million or so jobs by keeping the architecture of the auto industry, and its suppliers, in place. That's about the only way I can stomach it.