The airline industry goes bankrupt all the time. But we still have air travel. Why should we assume that bankruptcy means the end of the car industry?

My solution would be for the shareholders to be wiped out. All the secured debt holders to be given equity in proportion to how much money they were owed and all the unsecured to take a hike. After all that is done the Government should take over a portion of the pension obligations seeing as how the government has guaranteed them anyway. After all that is done, you would probably have a car industry that could survive on its own.

The worst possible solution (and the one that will probably happen) will be for the car industry to receive just enough money to keep on being a walking dead man.

(h/t Naked Capitalism)