1. Do you agree or disagree that the taxpayer financed bankruptcy represented the best way to save jobs? Explain your answer.
2. Discuss the relative fairness to the various stakeholders in a bankruptcy of a more traditional Chapter 11 bankruptcy, in which a firm emerges from the protection of the bankruptcy court following the development of a plan of reorganization versus an expedited sale under Section 363 of the federal bankruptcy law. Be specific.
3. Identify what you believe to be the real benefits and costs of the government bailout of General Motors. Be specific.
4. The first round of government loans to GM occurred in December 2008. The firm did not file for bankruptcy until June 1, 2009. Discuss the advantages and disadvantages of the firm having filed for bankruptcy much earlier in 2009. Be specific.
5. What alternative restructuring strategies do you believe may have been considered for GM? Of these, do you believe that the 363 sale in bankruptcy represented the best course of action? Explain your answers.

Rarely has a firm fallen as far and as fast as General Motors. Founded in 1908, GM dominated the car industry through the early 1950s, with its share of the U.S. car market reaching 54% in 1954, which proved to be the firm’s high-water mark. Efforts in the 1980s to cut costs by building brands on common platforms blurred their distinctiveness. Following increasing healthcare and pension benefits paid to employees, concessions made to unions in the early 1990s to pay workers even when their plants were shut down reduced the ability of the firm to adjust to changes in the cyclical car market. GM was increasingly burdened by so-called legacy costs (i.e., healthcare and pension obligations to a growing retiree population).