In negotiations with Chrysler and GM (GM), management has made sacrifices. Salaries have been cut or capped. Rick Wagoner lost his job. The UAW has made huge concessions on pay and the funding of its pension and health plans. Even suppliers are operating under the assumption that they may not make the kinds of profits that they did when the two companies were healthy.
But creditors at GM and Chrysler won't agree to be pushed for further sacrifices. News overnight was that Chrysler would go into Chapter 11 because its bondholders would not take the deal supported by the Treasury. So, as unsecured creditors, they are willing to take their chances in court.