Obama May Bankrupt Chrysler, GM

The Obama administration is considering a plan that would bankrupt General Motors and Chrysler and divide each company’s assets into “good” and “bad.” With the ejection of GM CEO Rick Wagoner, the plan marks the government’s rapidly increasing involvement in the auto industry. The plan is risky for Obama, as a bankruptcy filing could hurt thousands of important Democratic constituents—GM’s unionized workers. The “good” GM would retain brands like Cadillac and Chevrolet and remain independent, while the “good” Chrysler would be sold to Fiat SpA, if a proposed merger goes through. “We cannot, we must not, and we will not let our auto industry simply vanish,” Obama said in a speech Monday that set deadlines for both companies to draft plans to save their businesses before receiving more federal support.