General Motors Corp has tens of billions of dollars in government backing, a grudging labor peace and the support of its big bondholders as it gets ready for what is intended to be a swift dash through one of the biggest bankruptcy cases in U.S. history.

What could possibly go wrong?

Possible scenarios range from bad to catastrophic. Analysts say GM sales could sputter, its bankruptcy proceedings could get bogged down, the cost of its bailout could mount and government intervention may fail to solve the company's core problem -- making and marketing better cars.

Skeptics have already dubbed the automaker Government Motors, on the verge of being effectively nationalized with a $60-billion investment by the Obama administration.

The bankruptcy will put GM on track to slash debt and labor costs. It will drop the Hummer, Saab and Saturn brands and eliminate 40 percent of its U.S. dealerships, leaving a leaner company with a sharply lower cost-base.

But those achievements will stop short of a complete reinvention of the 100-year-old automaker.

If they even come back with a clean balance sheet, they still have to put out quality cars, said Bernie McGinn, president of McGinn Investment Management and a Ford Motor Co shareholder.

Just as there is no quick fix for GM's lineup, even a short stay in bankruptcy will see the automaker emerging into an 18-month-old U.S. recession that has ravaged the industry.

GM's U.S. sales are down 45 percent through April, with the public spotlight on its survival chances contributing to the decline. Sales are likely to suffer more in the bankruptcy.

How much worse it would get is anybody's guess, GM Vice Chairman Bob Lutz told reporters last week.

But we do know, we've researched this extensively and Chrysler's experience shows it: automobile companies in Chapter 11 have lower sales. That's a fact. That's one of the reasons why you want to get in and right out again, Lutz said.

LIKE CHRYSLER, BUT BIGGER

The bankruptcy plan for GM, similar to one being executed by Chrysler, calls for selling the automaker's best assets, including Chevy and Cadillac, to a new company within 90 days.

Shares of GM, once considered the bluest of blue chips, fell below $1 on Friday, reaching levels last seen during the Great Depression. The stock closed at 75 cents on what is expected to be its last trading day before it seeks bankruptcy protection.

Chrysler, which filed for bankruptcy on April 30, awaits a ruling on Monday on the automaker's proposed sale to a new company run by Italy's Fiat SpA.

The White House has said Chrysler's bankruptcy could be a hopeful model for GM.

But analysts said GM's reorganization would be several times harder to complete than Chrysler's because of its global reach and the larger number of investors and suppliers.

This isn't going to be the 30-day quick rinse that Chrysler's had, industry analyst Maryann Keller said. I think six months is absolutely a much better time frame than 30 or 60 days. This is going to be a lot more complicated.

'FUNDAMENTAL PROBLEMS'

GM, which has posted $88 billion of losses since the start of 2005, has too many plants, too many workers and too many dealerships to be comfortable with a dramatic decline in sales.

The automaker also has more than 3,000 parts suppliers, many of which have strained balance sheets and may require financial support because of extensive production cuts by GM and Chrysler since the start of the year.

I don't think they're going to be successful in answering the fundamental problems of this company -- they are addressing the financial issues, but not the business issues, said Stuart Hirshfield, a bankruptcy lawyer with the Mintz Levin law firm.

Under the restructuring, GM wants to reduce the number of U.S. plants to 31 by 2012, from 47 facilities now. It has also promised a new small car investment to the United Auto Workers union.

Although they have made significant progress on the cost side, the product side and the manufacturing footprint are still long-term challenges, Fitch Ratings managing director Mark Oline said.

To fund GM's restructuring, the U.S. government already plans to provide to another $40 billion, on top of $19.4 billion already provided in emergency funds. The total cost could quickly rise if GM falters, analysts caution.

I think this is going to be Obama's Vietnam, said automotive historian Bob Elton. Every time he turns around, there goes another $20 billion.

The deep government involvement in GM could make decisions on cost cuts and contract renegotiations more difficult.

GM also may be a hard sell when the U.S. government wants to exit the car business, a move not expected before 2012.

At one point, the government will put it back into public hands, but it's very difficult to unload on the public if it's not profitable, Hirshfield said.

(Additional reporting by Kevin Krolicki and Phil Wahba; editing by Patrick Fitzgibbons and Tim Dobbyn)

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