The Wall Street Journal reports that the Obama administration is considering an idea that would separate "good" and "bad" assets from the troubled automakers, and then push Chrysler and GM into bankruptcy to deal with their massive debts. In the case of GM, stakes in the "good" company would be given to debt holders. The article said the plan is being considered, but has not been finalized:
Sending GM and Chrysler into bankruptcy isn't a done deal. But both the government and the auto makers are planning for such an eventuality, barring dramatic, 11th-hour concessions from bondholders, unions and others.
The administration would like to see the "good" GM, comprising brands such as Chevrolet and Cadillac, remain an independent company, according to an administration official. Equity in the "good" Chrysler, meantime, would be sold to Fiat SpA, assuming that proposed deal goes forward, this person said.
