Editor 's Note : Jack R. Nerad is Executive Editorial Director for Kelley Blue Book and kbb.com , and co-host of `` America on the Road , '' heard on more than 300 radio stations . In the 1980s he served as Editor of Motor Trend magazine . Nerad is the author of `` The Complete Idiot 's Guide to Hybrid and Alternative Fuel Vehicles , '' published recently by Alpha Books . Jack Nerad says bankruptcy would drive car buyers away from GM and imperil suppliers . ( CNN ) -- The events of the past week have been unprecedented in the auto industry and in the annals of American business . As the events have unfolded , there is the strong implication from the administration 's automotive task force that Chapter 11 bankruptcy , followed by restructuring and `` cleansing '' of General Motors ' balance sheet , is a potential scenario in the ongoing efforts to keep the giant automaker alive . GM 's new chief executive , Fritz Henderson , acknowledged as much on CNN Sunday . `` You ca n't rule options off the table . So you basically say we will spend time to try to get it [ done ] outside of bankruptcy . But if we ca n't , we 're not going to compromise our goals . We 're going to get it done inside our bankruptcy . Our preferred approach is still to do it outside , but you ca n't rule out going in . '' Over the past few weeks pundits of all stripes have appeared on financial news networks suggesting that entering Chapter 11 is GM 's only way to future viability . `` Get on with it , '' they say , and save us the agony . It is the only way , they argue , General Motors can get relief from its immediate cash-flow issues , tear up or substantially modify its union contracts , dump unnecessary brands , close plants and `` right-size '' its operations . But those pundits who propose Chapter 11 fail to acknowledge that General Motors is a consumer-facing company whose success or failure is in the hands of millions of average Americans . This group will decide to buy or not buy General Motors vehicles based on what they know , hear and even feel about GM 's future . As talk of imminent bankruptcy swirls in the press , the news they hear about General Motors certainly is not reassuring , as they consider which brand to buy . How does that manifest itself in the car-buying public ? We at Kelley Blue Book asked 500 potential new-vehicle buyers a string of related questions that yield answers to that multi-billion dollar question . Their response is telling . Asked `` How likely would you be to buy a car from General Motors if they were to go bankrupt , '' 42.1 percent of new-vehicle buyers said they were either `` not at all likely '' or `` not very likely '' to do so . Even with a warranty guarantee from the federal government , consumers are not very enthusiastic about considering a GM purchase . Such a guarantee only moves the needle about three percentage points with 39.8 percent saying they were either `` not at all likely '' or `` not very likely '' to purchase a GM vehicle in such a situation . Asked , `` How likely would you be to buy a car from General Motors if they were allowed to keep operating but had to renegotiate their contracts and agreements with suppliers and laborers ? '' the responses changed . Given that scenario , only 31.6 percent of new-vehicle buyers said they were either `` not at all likely '' or `` not very likely '' to purchase a GM vehicle , and they were out-numbered by the 41.5 percent who said they were either `` very likely '' or `` extremely likely '' to do so . While one must keep in mind that consumers do n't always do what they say they are going to do , the import of this is clear : Bankruptcy puts a damper on consumer confidence and vehicle demand . There are other reasons to question the wisdom of a Chapter 11 filing as well . Beyond its potentially chilling effect on consumer demand , there is a domino effect on the supplier community . Many GM vendors have operated for years on ever-declining , razor-thin margins and are heavily dependent on GM for cash-flow . If that cash-flow ceases for even a relatively short period of time it could well send many of those suppliers into bankruptcy and force others simply to close their doors . The likely bankruptcies of supplier companies would have a ripple effect through the entire American vehicle manufacturing industry , causing hardships for the healthier companies as well . Further , while a `` quick-cleanse '' bankruptcy is contemplated , it is very difficult to imagine that the Chapter 11 bankruptcy of one of the largest industrial companies in the world would not take a year or more to unravel , rather than weeks or months . And if GM languishes in bankruptcy it is hard to imagine consumers flocking to buy its new vehicles . Nor is it likely the government would subsidize those operations through the potentially lengthy proceedings . The implications of the pronouncements made by President Obama and the auto industry task force indicate clearly that they believe a figurative hammer is needed to move the stakeholders -- the United Auto Workers union , pensioners , bondholders and creditors -- to accept settlements that are , at best , unpalatable to them . The threat of bankruptcy is that hammer . But the question should be asked : Is the hammer the task force is holding over the head of the GM stakeholders in an effort to get concessions , the same hammer that will drive away consumers and require the federal government to make larger and larger cash infusions or see GM founder ? So while some toss out the idea of a Chapter 11 bankruptcy as being a magic elixir for GM , which has found itself trapped in an unprecedented credit crunch and a sharp recession , we have to believe that bankruptcy is a bankrupt idea . The opinions expressed in this commentary are solely those of Jack R. Nerad .
Jack Nerad : Some say that a quick sale is best course for GM . He says bankruptcy will reduce production of GM cars , even with government warranty . He says GM itself could be driven into bankruptcy by such a move . He says bankruptcy is being used as a hammer for GM to get concessions .