Jim Manzi writes:

The crunch, of course, will come upon the expiration of these new deadlines. The current administration can get away with punting on tomorrow’s deadline without losing all negotiating credibility because they didn’t make the initial deal. But if they let these companies off the hook again, it’s hard to imagine management, unions or bondholders taking any future threats to let the companies go under very seriously.
I assume that it is not accidental that the Chrysler deadline will be reached prior to the GM deadline, and therefore further assume that the administration is actually either confident that they can make the deal work with FIAT, or failing that, that they really will let Chrysler go under. Chrysler may have to play Lehman to GM’s Citigroup. (Awareness of this Chrysler-GM timing dynamic by all parties, of course, makes it even more fun for Chrysler to negotiate with FIAT).