For Now, Big Three Off Bankruptcy Brink

At least for the time being, the automakers will get their wish: no bankruptcies.

Rather, the industry is slated to get a $15 billion bailout, financed by loans from an existing program that had been intended to fund a transition to fuel-efficient vehicles. An overseer chosen by President George W. Bush would monitor the industry's restructuring.

Progress on the bailout cheered the stock market Monday, with automakers leading. Ford(F Quote) rose 66% to close at $3.38, while General Motors(GM Quote) rose nearly 21% to $4.93.

Detroit's automakers have repeatedly acknowledged their need to restructure and submitted detailed plans to Congress last week. However, due to fourth-quarter collapses in auto sales, both GM and Chrysler say need infusions of billions of dollars to avoid liquidity crises.

Theoretically, an overseer would have the ability to force concessions by stakeholders, including the United Auto Workers, bondholders, suppliers, shareholders and others.

"The companies needed a bridge loan, and this $15 billion bridge loan gives them a chance to move forward," says Kriss Andrews, auto practice lead at business advisory firm BBK. "They also get oversight. Let's hope the oversight is wise oversight."

Earlier Monday, BBK and Anderson Economic Group released a study indicating that an automaker's bankruptcy would cost taxpayers up to four times the amount of the bridge loans. The study says a single bankruptcy would likely lead to the failure of at least two automakers, as suppliers failed, resulting in the loss of 1.8 million one-year jobs and $70 billion in federal and state tax revenue over two years. Consumers will not buy cars from a manufacturer in bankruptcy, the auto industry maintains.