GM and Chrysler: The government blinks

The Obama administration keeps saying that it will allow General Motors (GM) and Chrysler to go into bankruptcy if they do not come up with acceptable restructuring plans. The first deadline, March 31, came and went. GM CEO Rick Wagoner lost his job for not completing his company's plans, but the government gave the two firms an extension and more money.

Now, GM and Chrysler are each about to get another slug of money, and, once again, they have not completed their programs for cost cutting and debt restructuring. The administration is sending a signal to the unions and creditors that they can string out the negotiations.