" Bob Lutz, the vice chairman of GM at the time and an outspoken Republican himself, said the loan guarantees Romney talks about would not have made a difference due to the cash crunch at the time.
"The banks were even more broke than we were. Who had the money?" he told the Detroit Free Press in February. "Loan guarantees don't do any good if the banks don't have any money."
Without financing, both companies would have had to close. And even if they had survived, they could be struggling today rather than reporting record profits and strong sales. Many of their suppliers would have also been forced to shut down, and that could have caused bankruptcies at other automakers such as Ford Motor (F, Fortune 500), which would have been unable to build cars without their supplier base.
Lutz said Tuesday that the government was the only one willing to give GM most of the help it needed in return for stock in the company, rather than heaping on more debt that it couldn't afford. Even the Obama administration was reluctant to do that, Lutz said. But it was the only way a healthy GM could emerge from bankruptcy." LINK