I see you've been brainwashed by the decrepit media...

Major companies collapse all the time, it's the natural order of things.  When K-Mart went bankrupt, nothing bad happened.  K-Mart went bankrupt, that was that.  When they came out of bankruptcy, they had new management, it was a new company.  That it has the same name is irrelevant, the company died for all practical purposes.  K-Mart is now a successful company that makes a profit, it's useful.  Dead and dying K-Mart was a drain on the economy, an unproductive entity.

If GM had gone into chapter 11, GM as a company would be gone.  The management would have been tossed.  The insane union contracts that are giving people the equivalent of six figure salaries for work any trained monkey could do would all be gone.  The infrastructure and the brands would have come back as a company under new management that could compete with the other auto makers.  Instead they have the same high costs as they used to, and the same people that ran the company into the ground, are still running it.

Even if the worst case, dreaded chapter 7 were to occur, you'd get a vast improvement over what you have.  The assets would be sold off, those assets are worthless unless they're put to use making cars.  The brands only have value making cars, the factories have less value making anything but cars.  Investors would make a fortune off the relatively cheap infrastructure, and we'd have more smaller car companies competing against each other to make high quality automobiles at a better price.  In reality, chapter 7 would be outstanding for the country.

Our preventing them from collapsing or being taken over is what has created the monstrous, ineffective companies littering our economy today.  It's why we have massive layoffs and cutbacks year after year, why their stock values are in a continual decline, and why they keep losing to foreign competitors.  The market is no different from any other organic system, death is a necessary step in the cycle.  Eventually it's going to happen, the longer you wait, the worse it will get.