White House Mulls Automaker Bankruptcies

Feds would offer support in giving automakers 'soft landing'
By Harry Kimball,  Newser Staff
Posted Dec 18, 2008 2:33 PM CST
The White House.   (AP Photo)
camera-icon View 5 more images

(Newser) – The Bush administration is considering “orderly” bankruptcies as one way to help General Motors and Chrysler, the New York Times reports. The government could support the companies while working on the terms of federal protection, providing what the White House calls a “soft landing.” With the possibility of using TARP funds to bail out the automakers still up in the air, President Bush said he was “worried about a disorderly bankruptcy.”

In the case of a managed bankruptcy, a federal overseer would make sure the companies carried through on promises once under protection. The negotiation process could take months, allowing the public to become accustomed to the new arrangement. Both Chrysler and GM have retained counsel expert in bankruptcy and restructuring. The White House said discussions of a plan were “nearing conclusion.”