Novel

How Bankruptcy Can Save G.M.

Bankruptcy is usually considered the end of the road for a company, but for General Motors, it may be a saving grace. “The main advantage of Chapter 11,” Paul Ingrassia writes in Portfolio, “is that it would give G.M. a chance to wipe the slate clean and do what pretty much everyone agrees it needs to—reduce its number of brands and cut costs.” Currently, car dealers, labor unions, and suppliers are too powerful but bankruptcy would force them to the table. Chapter 11 would allow GM to reduce its number of domestic brands, as it needs to, from eight to two or three and close about 60 percent of its dealerships in the process. It would also be able to renegotiate better deals with the United Auto Workers and its largest supplier, Delphi.