• Washington Post, Wall Street Journal , Wednesday, November 12, 2008 10:45 AM

Without a humongous loan, GM is in danger of running out of cash. The company insists that Chapter 11 bankruptcy is not an option. For one thing, a CNW Marketing Research survey of new car buyers found that 80% would avoid a bankrupt automaker. Plus, the impact would reverberate throughout the economy. One in 10 American jobs is related to auto manufacturing, and automakers are the biggest buyers of a lot of U.S.-manufactured raw materials.

Some observers disagree with GM's position. Several airlines have successfully emerged from bankruptcy with streamlined payrolls and loyal customers. Then again, the plight of Daewoo Motor, which sunk during the Asian financial crises, is instructive. The brand has all but disappeared after it was sold off piecemeal.

The House will convene next week to vote on a plan to rush $25 billion in loans to the ailing industry. The Journal reports President-elect Barack Obama has ordered his transition team to look at ways to aid the car industry even before his inauguration. He reportedly is pressing the Bush administration to immediately free up funding through the Treasury, the Energy Department and the Federal Reserve, as well as studying other options.

Read the whole story at Washington Post, Wall Street Journal »