What GM Will Look Like, If It Survives

Detroit's long-overdue reckoning is here. With its cash vanishing at the rate of $2 billion a month, and with no bank in the world willing to lend it money, General Motors is headed toward bankruptcy or a government bailout.

On Thursday and Friday, executives from all three Detroit automakers will be on Capitol Hill arguing why it should be a bailout. Either way, assuming it survives at all, GM (nyse: GM - news - people ) will look a lot different than it does today: leaner and--keep your fingers crossed--more capable of competing with foreign nameplates. But you won't recognize what's left of the automaker William Durant cobbled together in 1908 and Alfred P. Sloan built into the world's largest and most powerful corporation.

Workers, suppliers and creditors will suffer. So will taxpayers. GM so far has asked for a bridge loan of $10 billion to $12 billion to allow it to pay bills until the global financial crisis eases, perhaps by 2010. But no one outside of GM thinks that this will be enough to get the company back on its feet. A more likely cost, we are told by Wall Street analysts, is between $20 billion and $40 billion. Congress and the Obama administration would probably be willing to sign the check in return for some environmental promises (making more small cars, for instance), some concessions by workers and the departure of the top executives.

Could the automakers forgo handouts and solve their problems via Chapter 11?

Not easily. A bankruptcy court could shrink liabilities for retiree health care, break contracts that protect auto dealers and order plant closings.

But judges cannot make workers accept lower wages and they cannot order customers into the showroom. A GM bankruptcy could drag down hundreds of suppliers and redouble existing worries about whether warranties will be honored.

GM's crisis is so dire that the company might well be able to achieve significant concessions without having to file for bankruptcy. This assumes, however, that management sheds its business-as-usual mentality.