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White House Considering “Orderly Bankruptcy” for Automakers

President George W. Bush and Treasury Secretary Henry Paulson are considering the option of an "orderly bankruptcy" as part of a rescue package for the U.S. auto industry. The New York Times reports that the action, which White House Press Secretary Dana Perino says is still just an option, would require concessions from the United Auto Workers, suppliers, banks, the federal pension board, bondholders, and a number of other stakeholders of General Motors (GM) and Chrysler; Ford Motor Company, which has said it will not require any federal money, would not likely be included in the deal. Under the bankruptcy option, according to the Times, the government would provide GM and Chrysler enough funding to operate for several months, after which a government-appointed overseer would bring company executives and other representatives together to map out steps that would lead to Chapter 11 bankruptcy filings. Bush said this morning that he is concerned with "putting good money after bad" and is still not ready to make a decision.

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