How did the automakers emerge from bankruptcy so quickly?

By Felix Salmon
July 7, 2009

Micheline Maynard has a good 1,000-word article today on the surprising fact that both GM and Chrysler managed to exit bankruptcy in record time. But who or what should get the credit? Steve Rattner? The two judges involved? Section 363 of the federal bankruptcy code? And is this a heartening precedent for the wave of future bankruptcies which seems inevitable when all those leveraged loans mature over the next four or five years? Or is it a one-off, linked to extreme levels of government involvement, which is unlikely to be repeated?

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Comments
3 comments so far

I have to think your last line is most on target. Government involvement and Obama’s use of the bully pulpit pressure creditors to get in line certainly helped move things along.

Posted by @jporter | Report as abusive

I also have to go with the Section 363 + government involvement, the size of GM, the nature of the industry (a long bankruptcy would likely force them in Chapter 7) and lack of any serious interest outside of the government. In that context Chrysler was arguably a way to show what would happen to dissenters in the GM bankruptcy (and likely a test to see if the horse at least made it out of the gate).

Posted by Argel | Report as abusive

i would give the credit to obama, without his help i think chrysler would be history. good job obama.

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