I should add that it will take time for experts to go through the plan carefully — and that, almost inevitably, they’ll come up with more concerns and questions as they do.

—Jonathan Cohn

According to the New Republic, Obama is a great detail kind of guy.

But–and this can’t be emphasized enough–Obama says it’s entirely possible that effecting the necessary changes will require a “surgical bankruptcy.”

Some of that may be posturing, aimed in particular at GM bondholders who have been resisting calls for concessions. Still, the administration seems entirely serious about the possibility. And, among people who have been involved in this debate, there’s increasing talk about a fast restructuring using Section 363 of the bankruptcy code–a process that would, in theory, allow the core of either company to continue operating without the burden of their huge debts. (More on that here, via Harvard Law Professor Mark Roe.)

Obama, in other words, is giving the industry a lifeline. But it’s not too long. Even with $6 billion in federal financing, Chrysler and Fiat might not make the partnership work. And whatever happens, the workforces of both Chrysler and GM are going to continue shrinking, as they have for a while now. (As Obama noted, the auto industry has already lost more than 400,000 jobs in the last year.)

Still, this is a much more promising path than the options on the table just a few months ago, when Congress was trying to craft a bailout and then–when that failed–President Bush stepped in with his own rescue.

For one thing, Obama and his ad visors have done due diligence. The task force immersed itself in every aspect of the auto industry, tapping outside consultants (including the well-respected Boston Consulting Group auto unit) and meeting one-on-one with major stakeholders. Obama and his advisers may not yet be experts in the auto industry, but they surely know more than almost anybody who was talking about this issue back in December in January.

Fine, they surely don’t know the basis upon which the entire industry is built is dissolving, that is, disposable income that is sufficient to support auto use. Context is everything.

Also, a bankruptcy is a bankruptcy, even if it’s called something else. When the US citizens have globalized themselves to the income and spending level of Chinese or Indian peasantry it will be interesting to learn whether those can recall the difference between the different sections of the Bankruptcy Code.