The bondholders can, and will, take a haircut. But it is not really particularly just to drive their loss up to 100%, rather than the 70 or 80% they are now facing, in order to keep making unprofitable cars at premium wages--and if you make it clear that the government will intervene to confiscate their money and hand it to the workers, Detroit will face even higher borrowing costs in the future. In a capital intensive industry, that is death.
Leave aside that you would be taking money from those who lent in good faith, violating a past agreed obligation, in order to satisfy a newly created future obligation to provide the UAW jobs.
The dealers will take some sort of a haircut, too; a lot of them are going to go out of business. (And check out some of the nasty surprises Detroit has recently handed its already struggling dealers in order to conserve its cash.) But dealers are not quite as useless as is generally supposed by people who fancy that we should all order our cars the way we order computers from Dell. I'm not saying such a thing is impossible--franchise laws have made it impossible to attempt that business model. But that business model is not as flawless as it seemed back when I was a newly minted MBA.,
As I now understand it, thanks to the helpful folks at McKinsey who explained it to me a while back, dealers are a way of handling the fact that auto manufacturing plants break even only at very high capacity usage; you cannot profitably make only 50 cars in a 500 car plant if demand is slow this week, because of your fixed costs (including labor!) Dealers take non custom inventory and craft deals that make it attractive to their local buyers. In other words, they haggle. We hate it--but if we didn't have it, our cars might either have fewer features, or be a lot more expensive, because of the scale problems.
They also provide capital for selling cars. Dealers have their own independent credit lines, which they use to buy cars, advertise, and so forth. Dealers may be parasites on the body public 95% of the time, but right now, they're probably helping keep the Big Three out of bankruptcy by carrying unsold inventory, not pushing them deeper into it.
Nonetheless, the consensus is that Detroit needs to trim dealers, to whom it also extends a great deal of credit, and consolidate operations. But even if we got rid of the franchise laws, getting rid of the dealers wouldn't get Detroit all the way.
Detroit could lean on its suppliers, of course, but that just pushes the bankruptcy--and the UAW job losses--back one level. Supplying Ford is not exactly a license to print money these days. And the rest of its components are bought on the open market.
What about management? I hear you cry. Management's salaries can (and are) being cut, for the same reason that labor's may be: they're not set in a perfectly competitive market. But they're not a big part of Detroit's overall cash problem. With a burn rate of $4 billion a month above revenues, getting all of Rick Wagoner's cash back, and making him buy his own coffee to boot, will run the company for about a minute.