Not much good can come of a General Motors ( GM)bankruptcy as far as shareholders are concerned.

Stockholders bear most of the risk when companies go down this path. Employees and unions tend to get hammered as well. It's the most brutal way to force a company to change. It's supposed to be the option of last resort.

So the fact that President Obama is even talking about a prepackaged bankruptcy option for General Motors and Chrysler suggests he holds little hope for the automakers to come up with a viable restructuring plan, despite giving them one last chance.

This is good poker. No one can know for sure whether Obama is bluffing, and the carmakers, their unions, dealers, bondholders and shareholders only have one more hand to play.

They better dig deep. Bondholders may have to accept a debt-for-equity swap to reduce the $27 billion in corporate debt they hold over General Motors. Shareholders need to prepare for the dilution that will cause. And unions need to brace for reductions in the health care and retirement benefits they have demanded over the years.

Most of the discussion centers on GM. So where does that leave Chrysler and its private equity owner Cerberus Capital Management, which bought an 80% stake in the company back in 2007? Well, they are shareholders after all and bankruptcy may not be kind to them either.

Ford ( F) is another company whose name isn't really coming up in this context. Wisely, Ford decided to take matters into its own hands in order to avoid entanglements with the government. However, a bankruptcy reorganization of General Motors and Chrysler might actually put Ford on weaker footing.

If General Motors and Chrysler can shed significant portions of their legacy employee costs, reduced their debt by force and emerge leaner and more competitive, then Ford will have lost whatever advantage it now enjoys. We saw that in the airline industry a few years back and the resulting shakeup continues to this day.

Ford will need to use the concessions won by General Motors and Chrysler to pressure its own employees, bondholders and shareholders to do the same. This will ripple through the economy as suppliers and dealerships in turn are pressured to fall in line with the new world order in the auto industry.

Ultimately, this is the road to consolidation. There's pretty much no getting around the fact that the U.S. auto industry became bloated and globalization changed the game. Heck, with Toyota ( TM), Honda ( HMC), Daimer ( DAI), BMW, Kia and Hyundai all building cars right here in the U.S., we've got ample capacity to meet consumer demand.

What's an American car anyway? Every car is filled with foreign parts.

Is it un-American to buy a Honda made in Ohio or a Toyota made in Texas or a Mercedes made in Alabama or a BMW made in South Carolina or a Hyundai made in Georgia? From the consumer perspective, this may become a moot point if GM and Chrysler end up in bankruptcy.

But for shareholders of General Motors -- and Ford as well -- the outcome of this poker game with the Obama administration may determine whether there is anything at all left in the pot for them.

GM and Chrysler would be unwise to assume Obama is bluffing.

Hall is the editor of TheStreet.com. Previously, he served as deputy editor and chief innovation officer at The Orange County Register and as a news manager at Bloomberg News in Frankfurt, Amsterdam and Washington, D.C. As a reporter, he covered business and financial markets, worked in both print and television in the U.S. and Europe, and conducted in-depth investigative coverage at The Journal-Gazette in Fort Wayne, Ind. His work also has been published in a variety of newspapers including The Wall Street Journal, The New York Times and International Herald Tribune. Hall received a bachelor�s degree in journalism and political science from The Ohio State University and has taken graduate management science courses at Boston University.

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