Obama, GM and Chrysler

My editors at the Guardian have taken to asking me to chime in whenever there is news about the car companies formerly known as the big three. Today I write that Obama's talk of bankruptcy may have been an effort to jawbone the companies' creditors:

Obama is backing up this tough talk by pointedly refusing to rule out a court-ordered restructuring – he used the dreaded word "bankruptcy" – as an option for the automakers. He specifically mentioned that bankruptcy could be used to reduce debt – a signal to bondholders to take a deal now or else risk waiting months or years to pick up the crumbs left over when the companies are liquidated.

Here's what Obama said:

What I'm talking about is using our existing legal structure as a tool that, with the backing of the U.S. government, can make it easier for General Motors and Chrysler to quickly clear away old debts that are weighing them down so that they can get back on their feet and onto a path to success; a tool that we can use, even as workers staying on the job building cars that are being sold.

Note that Obama mentions the use of bankruptcy as a means to "clear away old debts," not old labor agreements or contracts with car dealers.