That's where Chapter 11 would work for GM.
If they just made their Chevy line (cars,trucks,sports)and their Cadillac passenger line, they would have a sustainable business.
Americans are going to buy 12 million + cars, whether the Big Three are there or not.
The only hiccup in this plan is the cross-production the Big Three do for each other in parts such as windows,steering wheels, etc.
Chapter 11 bankruptcy will not work for the big 3. More appropriately the big 2, as the circumstances for each auto company is different.
Chrysler is terminal, it is going into chapter 7 liquidation, only a matter of when not if. GM is marginal, however it is also unlikely to survive a chapter 11 and if it is attempted, it will become a chapter 7. Ford is salvageable, but only if you save GM. If GM goes into liquidation, the effects will be the same as the sinking titanic, it’s mass dragging Ford into a watery grave along with it.
There are really only two options available, either let the entire American domestic auto industry fail or save GM with a lot of money. The $25 billion that the automakers are asking for is only a temporary salve, they will hemorrhage it out in months. The only way to save Ford and GM in particular is for the government to assume their existing pension and health care liabilities on to it’s own books. Then use that 25 billion to reduce existing overhead such as getting rid of all excess dealers and shedding brands down to 3. One mainstream, one luxury, and one sporty. There is no way to save jobs, as jobs will be cut. There is excess capacity not only with American car manufacturers but also with Japanese and German ones as well. However, this will save the domestic auto manufacturers (2 of them anyway, Chrysler will die) and make them lean enough to compete. I am surprised I have heard no one make this argument yet.