Various outlets now have complete details on Obama's plan for Chrysler and GM, as provided in background briefings by administration officials.
The gist is pretty simple: The administration believes that GM can survive--and, indeed, thrive--with the proper restructuring, so it will provide up to 60 days of working capital as the company revamps its management and negotiates with stakeholders.
Chrysler, though, is another story. The administartion does not believe the company can ever be viable on its own. As a result, it's giving Chrylser 30 days and $6 billion in financing to work out a proposed merger with Fiat. Once the time and money run out, the administration says, Chrysler is on its own.
Note that the administration is raising the bankruptcy option explicitly, and doing so for both companies:
While Chrysler and GM are different companies with different paths forward, both have unsustainable liabilities and both need a fresh start. Their best chance at success may well require utilizing the bankruptcy code in a quick and surgical way. Unlike a liquidation, where a company is broken up and sold off, or a conventional bankruptcy, where a company can get mired in litigation for several years, a structured bankruptcy process--if needed here--would be a tool to make it easier for General Motors and Chrysler to clear away old liabilities so they can get on a path to success while they keep making cars and providing jobs in our economy.
The emphasis is mine. And I suspect it reflects the thinking I describe in the item below.
For more, see accounts in the Wall Street Journal and the New York Times.
--Jonathan Cohn