[grandalf]

Also, if more than one of the companies failed, it would have sunk the PBGC (pension benefit guarantee corporation) which is the insurance policy that protects worker pensions.

The PBGC has been under-funded for a long time (due to crony capitalism and corruption benefiting both parties and the firms, at the expense of workers' security) and the result was that the automakers had a lot of extra leverage in bailout negotiations b/c the alternative for the government was the dissolution of the PBGC and the public realization of the fraud that had been going on.

[yummyfajitas]

Bailing out the PBGC would have been far cheaper than bailing out the UAW.

Among other things, the PBGC only guarantees pensions to the tune of $45k/year with no benefits (unlike the UAW pensions).

http://www.pbgc.gov/wr/benefits/guaranteed-benefits.html