Forget this bailout and loans and crap, here's what you do, Promise that the Federal Government will guarnatee the warantees on the products of the companies that declare chapter 11. Let the ones that need to file Chap 11, get rid of their legacy costs, let them restructure and arise leaner and more competative.
This guarantee will get rid of the concern that a car company in Chap 11 will have a hard time selling vehciles, since now the government is assuring that parts and service will be available should the company go out of business.
If the company survives it costs the government nothing, if it fails it costs the government the balance of the warrantee claims on cars bought from them, that's it. Far cheaper and lower risk to the taxpayer and doesn't throw good money after bad.
Doesn't pander to the UAW, doesn't give tax money to companies to spend on plants overseas, etc etc etc.
DONE... but that practical solution will NEVER come out of DC.
Alright, now step away from the logic before you get hurt.