The Obama administration is considering what to do about the country's biggest carmaker, General Motors, which is battling to survive.
For GM, a key financial battle has turned into standoff that involves four parties: the company, the White House, the United Auto Workers union and GM's bondholders. Billions of dollars in bonds and health care benefits are at stake.
When the government agreed to rescue GM last year, it set terms. Both the union and the GM bondholders would have to take big losses on what the company owed them.
But as a Tuesday deadline looms for the carmaker to prove it can actually survive, the bondholders and the union refuse to make a deal.
"There's a giant game of chicken going on," says Susan Helper, an economics professor at Case Western Reserve University in Cleveland. Helper says both sides are trying to do whatever they can to limit their losses — and nobody wants to go first.
"The question is, who's going to accept less in terms of payments in the future," she says. "So, who blinks first is going to determine who bears what sacrifice."
The bondholders bought GM's debt when it was mostly investment grade. Now, the company is offering just 33 cents on the dollar and the rest in stock. The bondholders want a better deal, and they're worried the stock could be worthless.
Why should the bondholders even consider this? Well, if GM goes into bankruptcy, they could get zero cents on the dollar.
The UAW is worried, too. In the past, GM has talked about giving the union 50 cents on the dollar for retiree health care obligations. In bankruptcy, those benefits could also be wiped out.
This is the White House's big stick: halting federal aid to GM and putting it in Chapter 11. Referring to Chrysler as well, President Obama reiterated the threat on Thursday.
"If they're not willing to make the changes and the restructurings that are necessary, then I'm not willing to have taxpayer money chase after bad money," Obama said.
But a GM bankruptcy could cost a large number of jobs and deepen the recession. And — for now — both the bondholders and the UAW seem to be betting the White House won't go that far.