Ironically, I believe your post proves my point.

The fact that two of ten companies successfully reformed thanks to Chapter 11 proves its value. These companies - Texaco and United - were successful because they had products/services desired by the marketplace, and their customer base was reasonably forecasted to continue seeking their products/services. If Ford, GM and Chrysler can say the same, they are indeed Chapter 11 candidates. If their customer base has evaporated, and obtaining or maintaining any market share is doubtful, all the free money in the world accomplishes nothing.

What Ford, GM and Chrysler have intentionally deferred to discuss is that merger and acquisition may be more viable that maintaining separate status. Ford acquired Lincoln and Mercury that way. GM did the same with Cadillac, Chevy et al. Chrysler did the same (remember American Motors, Nash and Jeep?). The marketplace has options other than Chapter 11 or the world's biggest tin cup - they just need to apply them, but greed is preventing that.

The scare tactic of saying that "liquidation" will cause the end of life as we know it is silly. Companies sell off and buy assets all the time, and if the asset has value (e.g., a factory which can be made profitable), it's title transfers to someone else and business continues, even if it is in a different form. If the asset has no value, no amount of money can turn dung into doughnuts.

So, if the cost to the taxpayer really is relatively the same in the end (which is doubtful), then Chapter 11 still makes sense. At least there would be oversight - courts can do that, but nowhere else in the Fed is there such capacity, and any attempt to put it in elsewhere effectively would be wishful thinking. Somehow, giving a lot of money with no effective oversight to the same folk who got their companies into this situation is like going to eat again at the same restaurant where you got food poisoning.

If the concern is subcontractors/vendors/suppliers having debtor protection, they too took risks knowing their customers and their shaky status, and Chapter 11 is open to them if they are over-extended. If we are hell-bent into opening our wallets and playing Santa to the auto industry, then the Chapter 11 plan(s) could be based on the Fed providing limited debtor protection via bailout moneys distributed via a commercial bank currently under task-order contract to the Treasury (there are a few of these) under specific conditions. That way the court still has control and we may financially survive. Anything else is like our Foreign Aid giveaway programs which find a goodly chunk of the funds spirited away into offshore numbered accounts.

I've seen a lot of con games in my life, and most of them have the "mark" having to act quickly, or else they will miss out on the bargain, or there will be catastrophic results. This has all the trappings of a con game where there are just more zeroes at the end of the number on the check.

We have a solution under law. Nothing stops it being exercised, and modified as necessary under court oversight. That's OUR protection! Don't we deserve that?