Reports that GM Wants to Force GM Into Bankruptcy

We have reports that appear to be leaked from the White House that say that they want to see GM go through some sort of preplanned bankruptcy here, and here.

I don't see this happening, and I tend to agree with Yves Smith's analysis that says that this would be next to impossible, because you would have to essentially get all the creditors to agree ahead of time.

Smith suggests that a realistic timetable for a bankruptcy would be over a year, and the analysis of the cascade effect on auto parts suppliers is that no one in the United States, including Toyota, Nissan, and Honda, would be able to make automobiles for something on the order of a year, because it would force the already tightly strapped auto parts suppliers into bankruptcy too.

I see this as primarily a way to apply pressure to two parties, the UAW and Pimco, who runs the world's largest bond fund.

I think that Pimco is particularly a problem. Their behavior in the GMAC bailout was to dig in their heels, and make everyone else take a haircut, and all indications are that they are doing the same thing with GM.