Just hours after Senate Republicans shot down the bill that would have given billions in aid to the Big Three U.S. automaker, several U.S. government departments and agencies stepped forward vowing funds would be available to the struggling industry – including the White House. However, those funds might not be exactly the kind of loans the Detroit Three were looking for, with bankruptcy still a possible outcome.
According to the Associated Press, the White House is considering one option that would see the Big Three accepting a “managed bankruptcy†deal in exchange for at least $15 billion in low-interest loans. The White House failed to elaborate on what it meant by a managed bankruptcy, but it would likely be similar to a Chapter 11 filing, just without the official title.
However, no matter what they call it, bankruptcy is not a foregone conclusion. Any type of bankruptcy for the Big Three would be a huge undertaking, requiring talks with all levels, from the union to management.
Whatever the case, it looks like the White House will step in before Detroit witnesses a complete collapse, with a decision expected as soon as Friday.
