Obama's Leading Option For Automakers Is Bankruptcy

According to reports from the Wall Street Journal, the Obama administration's leading plan to fix General Motors (NYSE: GM) and Chrysler LLC is to use the bankruptcy process to purge the company of bondholder debt and retiree health-care cost and in essence split both companies into "good" and "bad" components.

The "good" GM would comprise brands such as Chevy and Cadillac and the "good" Chrysler would be sold to Fiat.

NOTE: This leak could be part of a plan by the administration to force the bondholders and the union to make serious concessions.

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