Chrysler’s spiral into bankruptcy may give the Obama administration leverage in drastically reshaping General Motors, David E. Sanger and Bill Vlasic write in the New York Times. GM bondholders now know Obama isn't kidding about bankruptcy court, and could fear being stuck with paltry court payouts. Obama's offer of 225 shares for each $1,000 in debt “may not be such a bad deal in the end,” one auto expert said.
Bondholders also know GM is no Chrysler, where many of the job-cutting decisions had already been made, Washington only took a small stake, and a private investor offered help—none of which is true for GM. The dying automotive giant's bondholders, which include pension funds, do have one ace in the hole: "They will probably attract more sympathy than Chrysler’s Wall Street lenders did," Sanger and Vlasic write.