DETROIT • General Motors, the company that put tail fins on a Cadillac and was once the nation’s largest employer, moved to the edge of bankruptcy Wednesday, as debtholders rejected a last-ditch deal. Crosstown rival Chrysler hoped to pull off a quick exit from Chapter 11 and prove there is hope for a leaner Detroit.

Investors who are owed billions of dollars by GM rebelled against a plan to accept a stake in the company in exchange for their bonds, one of the government-imposed conditions for restructuring out of court.

A bankruptcy filing could come within days – perhaps Monday, which had been the government deadline for GM to reorganize.

Meanwhile, Chrysler was in a marathon session in federal court in New York, trying to persuade a judge to sign off on its plan to sell most of its assets to Italian automaker Fiat.

Since Chrysler entered bankruptcy protection four weeks ago, its sales have fallen but not tanked, raising hopes that both automakers might be able to shed debts and modify contracts under court protection and emerge leaner, stronger and more competitive.

The U.S. government has pledged to back both companies’ warranties to reassure consumers their purchases will be protected no matter what happens. Analysts say that seems to be helping Chrysler, where sales during the first two weeks of May fell at about the same rate as the whole U.S. market.

Dana Johnson, chief economist at financial-services company Comerica, said Americans are more accustomed to the bankruptcy process than many people think.

“Banks fail and reopen under new names, and that doesn’t seem to be much of a problem,” Johnson said. “It seems to happen all the time with the airlines, and they keep flying.”

GM, the century-old American icon that put a V-8 engine in the Chevrolet, was once the symbol of American industry. In 1979, it employed 618,000 Americans, more than any other company. By early this year, that figure was just 88,000.

Late last year, the U.S. government began pouring billions of dollars into both troubled automakers, fearing that their failure could push the struggling economy into a depression.

In the years after World War II, no one would have imagined the collapse of either, but since then, there have been so many corporate crises and economic black eyes that people have had time to get used to it, said Robert Thompson, a Syracuse University professor who studies American popular culture.

“It really takes optimistic thinking to think that this country is going to ever get back to that place in its manufacturing history,” he said. “It’s not just automobiles. You look at manufacturing across the country, it’s really grim.”

At GM, which has received $19.4 billion in government loans and will need billions more to get through the bankruptcy process, the bond offer’s failure kicks a leg from under its out-of-court restructuring effort.

Together, GM and Chrysler employ more than 126,000 people in the United States, and hundreds of thousands of others working for parts suppliers, dealerships and other associated companies rely on them for their livelihoods.

Some feared that if either company were forced into liquidation, parts makers would go under, too, pulling down Ford, the only one of the Big Three that hasn’t taken government aid.

From the perspective of GM workers, Comerica’s Johnson said they probably don’t care whether a reorganization takes place in bankruptcy court or not, as long as the company remains viable.

GM has already announced plans to end its relationship with about 1,100 dealers.

Chrysler has a similar plan to sever ties with about 800.

DETAILS

Founded in 1908, GM was once the symbol of American industry. It was the global sales leader for nearly 80 straight years.

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