General Motors is already bankrupt every way but legally

News that General Motors told the Treasury Department this week that it could seek bankruptcy protection comes as a surprise to no one, except maybe the federal regulators who have been propping up the auto giant with billions of dollars in taxpayer money since last year. The admission, the first time GM has openly discussed a bankruptcy filing, appeared in a regulatory filing about its restructuring progam, according to the Reuters international news service. Of course, new GM chief executive Fritz Henderson, who took over the top spot after the Obama administration demanded the removal of former CEO Rick Wagoner, mentioned the possibility earlier in the week after its proposed restructuring plan was rejected by the government. In its report to Treasury, GM said it was trying to restructure out of court but would file bankruptcy if it was unable to reach cost-saving agreements with its bondholders and employee unions. "If the changes needed for long-term restructuring cannot be obtained out of court, the company is prepared and would consider in-court options,” GM said in its filing. The United States has loaned the automaker billions of dollars in an effort to help it recover from the economic downturn, and also has suggested guaranteeing warranties and aiding GM in emerging from bankruptcy after restructuring. But if what GM really wants is to get out of its labor contracts while stalling on new car development and continuing to overpay its executives, maybe it really should get out of the way and let emerging automakers with better ideas take over.