The biggest headline about the Obama Administration's plan to restructure the car industry was the sacking of GM's (GM) CEO Rick Wagoner. But the more important news was the threat to force Chrysler into Chapter 11 if it cannot do a deal for a partial or complete marriage with Fiat. It indicates that the government may not be willing to spare the industry from bankruptcy. It also shows that if GM cannot engineer a radical restructuring that it may be next into bankruptcy court.
According toThe wall Street Journal, "Chrysler LLC has failed to make its case to the federal government that it can be viable as a stand-alone company, and may have to resort to restructuring through bankruptcy court, the Obama administration's auto industry task force concluded."