GM's Bankruptcy Option

Ousted GM boss Rick Wagoner might consider this an April Fools' joke, but the New York Times reports that the Obama administration is looking to ease the distressed automaker into “controlled” bankruptcy—that's "somewhere between a prepackaged bankruptcy and court chaos, by persuading at least some creditors to agree to a plan that would cleave the company into two pieces." Essentially the government plans to use its considerable leverage of being the de facto lender of last resort to calm the fears of some potential creditors. GM's new CEO, Frederick "Fritz" Henderson, also telegraphed the government's plans in an interview with the Wall Street Journal, saying, "They think that I can lead this company inside or outside of bankruptcy court." The administration appears to be drawing in part from its experience with troubled banks, the goal being to create, "a new, healthier G.M., but leaving behind its liabilities and less valuable assets, perhaps for liquidation," writes the NYT.

With a 60-day ultimatum for GM to restructure or face Chapter 11, Henderson is committed to extracting a new deal from the United Auto Workers union, and that puts huge pressure on UAW President Ron Gettelfinger. "There is virtually no chance that the companies can make the necessary cuts without the U.A.W.’s surrendering some hard-won benefits for its members," writes the NYT. And if the unions stand firm and refuse to compromise? GM goes into bankruptcy and creditors can persuade a judge to set aside labor contracts and terminate pension plans.

Things aren't any better for Cerberus, which, in exchange for handing over to the government its 80.1 percent stake in Chrysler, is trying to secure federal money to salvage its other tanking Detroit investments: GMAC Financial Services and Chrysler Financial. The specter of one or even two Detroit bankruptcies is not going down well at Ford, the only one of the Big Three to refuse federal rescue funds. It worries that a restructured GM or Chrysler will place Ford at a competitive disadvantage and also could "damage the networks of suppliers and dealers shared by Detroit's three auto makers, throwing uncertainty into Ford's parts deliveries and its retail operation," the WSJ reports. Meanwhile, as Italian automaker Fiat prepares for its new role as "Chrysler's savior" (seriously), USA Today reports that "Fiat cars are unreliable and unsatisfying, according to two respected independent U.K. surveys of European-market vehicles." Sounds like a perfect match.

In London, site of the G20 meetings, businesses are boarding up shop windows as they brace for an onslaught of protesters who blame bankers for the mess we're in, the Financial Times reports. "Thousands of anti-G20 protesters are expected to converge on Wednesday on the City, where they will march on the Bank of England," the newspaper reports, adding that the chant expected to rise from London's financial Square Mile will be to "reclaim the city." Meanwhile, the reality is that fat-cat bankers are looking pretty lean and scruffy these days. According to the WSJ, the global M&A market "hit the skids" in the first quarter of 2008, with the volume of acquisitions down 21 percent year-on-year.

The G20 fireworks have already begun on the diplomatic side. In an interview with the FT, Japanese Prime Minister Taro Aso chided Germany for its steadfast position of fiscal restraint. It is stimulus spending that is needed to jump-start the world's largest economies, Aso told the newspaper, adding, "I think there are countries that understand the importance of fiscal mobilisation and there are some other countries that do not—which is why, I believe, Germany has come up with their views." France, too, is wavering, the newspaper adds, with President Nicolas Sarkozy threatening to sit out the talks altogether.

The tech world is buzzing today over news that Facebook CFO Gideon Yu is leaving the company. The NYT points out that it was Yu who was the architect behind the landmark funding deal in 2007 that valued the upstart social network at $15 billion. In a tantalizing public statement, the social network said it "will be looking for someone with public company experience," leading Business Week and others to wonder whether this means Facebook is planning to go public any time soon. Facebook responds that there are "no current plans to go public."

Finally, the day after USA Today announced new losses from the downturn in travel, a major British newspaper, the Guardian, announced a radical new step: It will "become the first newspaper in the world to be published exclusively via Twitter." Now, what day was it again?