Automotive News reports that if GM is forced to declare bankruptcy, the federal government could be forced to take on the burden of paying for the pensions of tens of thousands of retired autoworkers:
 

A General Motors bankruptcy could become a nightmare for the federal government’s Pension Benefit Guaranty Corp.

That’s because the automaker could dump as much as $13.5 billion in unfunded pension liabilities onto the U.S. agency that takes over troubled pension plans — the largest ever from a single company — if GM were unable to fund its U.S. defined benefit plans and terminated them.

The claim would be almost twice as large as the current record of $7.5 billion from the 2005 termination of the Chicago-based UAL Corp.’s United Airlines pension plans.

For this to happen, GM would have to terminate its plans and PBGC officials would have to agree to cover all the unfunded pension liabilities of the company’s U.S. hourly and salaried plans. Together, the plans had a combined $84.5 billion in assets and $98.1 billion in liabilities as of Dec. 31, according to its 10-K report.

And that’s just for General Motors. Add in Ford and Chrysler and the total amount the PBGC estimates it would have to absorb would be more than $40 billion. With the collapse in stock values for these companies, the value of their pension funds has dropped far below their liabilities.

The further problem is that when the PBGC takes over the pension systems for bankrupt corporations, there are limits on how much they can pay out each month and those maximums are usually considerably lower than the benefits the pensioners were due to receive under the private pension. That could further reduce demand and place untold numbers of people in even more economic peril than before.