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The Twisting Road to Saving GM and Chrysler

AP

If you thought March 31 would be the day the government would make a final pronouncement on GM and Chrysler, it's time to think again.

By all indications, the end of this month will not be the end of the saga surrounding two of the big three. If anything, it's simply one more mile post on the long road toward a destination that's very much unknown.

By next Tuesday, expect President Obama's Auto Task Force to extend the multi-billion dollar lifelinesthe Federal government has already thrown to GM and Chrysler. Sure, we will likely see more conditions attached to those lifelines. And President Obama's auto team will probably tell us it is making progress working with the auto makers, UAW, and bond holders on restructuring these troubled companies.

The one thing we won't hear is a pronouncement that things have been solved.

If you thought this mess would be cleaned up in three months, remind me to never follow your picks for an NCAA basketball pool.

The truth is, saving GM and Chrysler will take a lot more than what the Treasury Department asked for in the bail out it gave the companies back in December. That deal was flawed from the get go. President Bush's people didn't want their final weeks in D.C. to include pushing GM, Chrysler, and a whole host of companies into bankruptcy. So they threw together a bail out, threw the keys to President Obama and said "you fix it".

Now Steven Rattner, Ron Bloom, and the Auto Task Force are trying to do just that with two companies crippled by severe problems. Oh and as if that's not tough enough, they have to pull off this feat when auto sales have plunged to 27 year lows. No wonder these guys have little choice but to tell GM, Chrysler, bond holders, the UAW, President Obama and the American people, "We've got more work to do."

This is not kicking the can down the road.

The auto team will eventually reach a point where it tells the Treasury Secretary, "enough is enough, either they sink or swim." I suspect that point will be late May since GM has a $1 Billion bond payment that comes due June 1. So sometime before then, the Task Force will have to know that everyone is on board with a restructuring plan at GM.

April and May should be interesting to say the least.

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