There is very limited risk that GM declares bankruptcy now due to the domino effect that it would have on everyone upstream of them (suppliers, dealers, etc). If GM was allowed to declare bankruptcy, they would be allowed to stop making payment to suppliers, which would force them to shut down. Those suppliers would cause problems not only for GM for other Domestic auto plants (not just American companies) as suppliers usually sell to different brands. This could possibly lead to another big automaker filing for bankruptcy, and so on. This is often referred to as the “systemic risk” of a failure.
The government knows this and will not let it happen (a similar reasoning was used for bailing out AIG to the toon of $185 BILLON, but with risk was to other insurance and finance companies). The average Joe Honda driver was disgusted by the fact the government was going to loan the US makers money, that they contacted their Congress person and said hell no, so in turn Congress added the "Viability Plan" dead line, which is the March date. It is not believed that GM or Chrysler will have any problems generating a plan that Congress accepts, it just a hoop to jump through.
I really wish that the media would stop using the term bailout, these are very expensive loans that take first priority in repayment (over most other debt and obligations) . The government has been forced to lend money due to the current frozen credit markets. Fact is companies that used to be able to borrow money at 6% are now being forced to be +12% for government money, with lots of strings, due to a lack of available credit.
But enough rambling about business, I want to think about my nice new Camaro that will be coming soon.