GM or Chrysler Bankruptcy: More Gain than Pain for Car Industry?

Americans by 2-1 think U.S. automaker bankruptcies would help rather than hurt the car industry, most doubt that it would damage the broader economy – and relatively few say it would have a strong impact on their own car-buying intentions.

Those indicate that a Chapter 11 filing by one or more of the Big Three automakers is hardly the public-opinion bogeyman some suspect. Indeed most Americans see a neutral or positive impact – consistent with the fact most steadily have opposed the federal loans floating GM and Chrysler, saying the main problem is their own management.

Click here for PDF with charts and questions.

Such views carry political weight: Out of 13 individual issues tested in the latest ABC News/Washington Post poll, handling the situation with the U.S. automakers is the only one on which most, 53 percent, disapprove of President Obama's performance.

IMPACT – The poll finds that 43 percent of Americans think that filing for bankruptcy protection while restructuring would be a good thing for the auto industry in the long run; 21 percent, by contrast, think it'd be bad for the business. The rest see no difference.

In terms of the national economy, fewer think an automaker bankruptcy would be affirmatively good – 30 percent – but that's as many as think it'd be bad, 27 percent. And a plurality doesn't think it'd make much difference to the broader economy either way.

Twenty-five percent say they'd be less likely to buy a car from a company in bankruptcy restructuring. But fewer, 14 percent, say they'd be "much" less likely to do so. And 10 percent say they'd in fact be more likely to buy a car from such a company – 5 percent, "much" more likely.

GM announced its latest restructuring plans today, trying to meet a June 1 deadline to satisfy federal regulators. Chrysler is seeking a merger with Fiat, again with Washington holding the shotgun. Either or both could still wind up in Chapter 11, the bankruptcy procedure that enables them to stay in business while restructuring.

Chapter 11 Bankruptcy for GM, Chrysler

CAR BUYING – A key question is whether an automaker's bankruptcy filing would dissuade people from buying its vehicles. This poll suggests challenges, but hardly insurmountable ones: Sixty-five percent say a Chapter 11 filing would make no difference in their decision, and, as noted, 10 percent say it'd make them more inclined to do so.

Strongly held attitudes can be most impactful, and that number is low, a net 9 percent strongly negative – the 14 percent much less likely to buy from an automaker in bankruptcy reorganization, minus the 5 percent much more likely.

That's a less negative result than previous polls have found; a difference is that those surveys simply used the word "bankruptcy," which may be understood as liquidating a business (Chapter 7 of the bankruptcy law). This poll specified that the companies instead would file for protection while reorganizing their business, as Chapter 11 provides.

What really matters are preferences among the few people who are actually looking to buy a car, not among all adults. Nonetheless, automakers can take some heart from the fact that, overall, the impact may be substantially less negative than feared.

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