The retirees want to keep their benefits despite the car companies’ massive restructuring plans and possible bankruptcies. Salaried retirees are not covered by union contracts and are therefore more vulnerable during restructuring. The retirees are from GM, Chrysler, Ford and Delphi, the auto parts maker.

“Some people think that we’re the fat cat execs. That’s not true at all.” — said Chuck Austin, president of the National Chrysler Retirement Organization and an engineer who retired after 40 years.

Delphi has been in bankruptcy for three years and has already cut retirees’ health care coverage this year. White collar retirees include those in sales, marketing, administration, and others in middle management.

If customers are scared away by a bankrtupcy, GM would have little hope of survival. A bankruptcy judge could rid GM of many of its most pressing problems, including crippling debt and union contracts, but it could not force Americans to buy GM’s cars. Obama has said that the federal government would finance a bankruptcy and back the carmaker’s manufacturer’s warranties.

“If you buy a car from Chrysler or General Motors you will be able to get your car serviced and repaired, just like always. Your warranty will be safe.” — President Obama

GM is now on a 60-day deadline to restructure its debt or face bankruptcy. The odds for success aren’t good: 90% of companies that enter Chapter 11 bankruptcy fail within three to five years.

Last-minute concessions negotiations between the UAW and both GM and Chrysler were said to continue all through last night.

President Obama backed away from a prior promise to appoint a car czar to oversee GM and Chrysler, instead deciding to name a Presidential Auto Task Force under the leadership of Treasury Secretary Timothy Geithner and Ron Bloom, a former adviser to the United Steelworkers that told the steel workers’ union to accept major concessions as part of bankruptcy filings. Will Bloom do the same with the UAW and GM? Those who’ve previously worked with Bloom think so.

“The management of the Big Three are probably not going to like what Ron Bloom has to say; the UAW is not going to like what Ron Bloom has to say; and certainly the stockholders and creditors will not like what he has to say,” said Michael Psaros, a co-founder of private-equity group KPS Capital Partners, who has worked with Mr. Bloom in and out of bankruptcy courts. He adds that Mr. Bloom has “repeatedly shown an ability to transform struggling companies into profitable going concerns.”

GM and Chrysler’s plans for viability are to be submitted to the Treasury Department by 5pm today, Tuesday and are required to include concessions from the UAW on labor and healthcare costs. In addition, GM’s bondholders are required to make similar concessions on debt and according to insiders in on the negotiations, the bondholders presented a plan to the GM board on Monday.

What else will the reports include? What else can GM cut?

GM could announce plans to axe one or more brands, including Hummer, Saab, Saturn, or even its old mainstay, Pontiac. GM has previously said that all these brands are on the table. It has also said in previous filings with the government before a bailout was granted that it could decrease American plants from 47 to 38 within four years. The Wall Street Journal reported Saturday that GM will outline a bankruptcy contingency plan in its report, although it has previously said that bankruptcy is untenable. An insider reports that GM will argue that the government would spend more on the company in a bankruptcy situation than it would to keep GM from bankruptcy.

Chrysler could announce a renegotiation of its secured debt (it’s not saddled with the massive amounts of unsecured debt that GM is), plant closings, or international partnerships with Nissan or Fiat, which recently took large shares of the company in exchange for partnership plans for small cars.

“a bankruptcy judge, who will, among other things, void the company’s contracts with the unions and start over from a baseline of zero. Since this is exactly what the $18 billion was supposed to prevent, it’s hard to see… [the government] turning around and making it happen themselves.

As a condition of the bailout funds, if the federal government cannot come to terms with GM and Chrysler’s other creditors about heading to the front of the pack, the government can send the companies into bankruptcy as a condition for further loans and go to the front through converting the bailout funds to “debtor in possession” (DIP) loans to the car companies, which are dealt with first in bankruptcy proceedings.

The automakers have rejected any calls for bankruptcy, saying the process would lead to liquidation after scaring off further creditors. Both are attempting to pare down debt in anticipation of a February 17th deadline for presenting plans on how they can repay the government loans.

GM is renegotiating $27.5 billion in debt in an attempt to get it down to $9.2 billion in exchange for equity to debtors. Chrysler owes $7 billion to Goldman Sachs, JPMorganChase and Citigroup and another $2 billion to Cerberus Capital Management and Daimler, which own 80% and 20% of Chrysler’s shares respectively. GM is on the hook to JPMorgan and Citigroup for $6 billion in loans.

Lawmakers discussing the bailout had pointed out that taxpayer money should not be lost if the companies failed.