“As goes Chevy, so goes America”, an old saying that I do hope is not true.

General Motors Corp. stock closed below $10 per share Wednesday — its lowest level since Dwight Eisenhower was president, power brakes were new and the Bel Air was the automaker’s hot new car — after dreadful June auto sales led one analyst to write that “bankruptcy is not impossible.”

Even if GM management feels it doesn’t need to borrow the money, doing so probably would ease investor anxiety.

Although bankruptcy could make it easier for GM to shrink its brand and dealer network to the size it truly needs in North America, “for a consumer-product company, it’s a fearful prospect to contemplate because of consumer perceptions,” Phillippi said.

A Chapter 11 bankruptcy reorganization might help GM become more competitive, he said, but it would have to worry that customers would stop buying its products for fear parts and service wouldn’t be available or that the company wouldn’t survive.

“We believe that the weakness in demand and deteriorating mix through the first half of 2008 are just the beginning of what is shaping up to be a more severe downturn than even the most bearish industry observers expected,” Murphy wrote. “In the wake of a deteriorating economy, a weakening consumer and rising gas prices, we expect industry volumes to decline significantly.