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General Motors could soon follow Chrysler into bankruptcy protection and the process is unlikely to be simple or swift for either troubled automaker, analysts warned.

“Bankruptcy may indeed be the last, best option to restructure General Motors because of the multitude of challenges the company faces and its deeply entrenched stakeholders,” said Doug Bernstein, head of Plunkett Cooney’s banking, bankruptcy and creditors’ rights law practice group.

“But it’s unrealistic to expect that the process will go smoothly and quickly,” Bernstein said.

“The company is massive, its operations are complex, and it has thousands of potential claimants and interested parties.”

In announcing Chrysler’s bankruptcy Thursday, President Barack Obama insisted that “Chrysler and GM are going to come back” and said a restructuring under court protection, along with a partnership with Italy’s Fiat, would give Chrysler “a new lease on life.”

While Obama said his team would continue to work with GM to develop a long-term viability plan ahead of a June 1 deadline he also warned that “we simply cannot keep this company or any company afloat on an endless supply of tax dollars.”

Canadian Prime Minister Stephen Harper warned that both the US and Canadian governments “will insist that all of the stakeholders make the sacrifices necessary to ensure the long-run viability” of General Motors.

“If they do not, governments will not participate in the restructuring,” he said after announcing that the Canadian government would allocate $2.4 billion to help Chrysler emerge from bankruptcy. - AFP

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