"It increases the pool of qualified applicants, reduces the costs of training, is good for the company's reputationin the community and enhances employees' morale by letting them work with students, " Morgan says.
Whether a particular sector should be regulated by government (via laws and so on) or whether it can be happily regulated by normal market forces (such things as reputation and so on) depends in part upon the costs of each method: the transactions costs.
Once in Chapter 11 bankruptcy the unions would have less clout and GM might suffer greater costs (for example to its reputation, and with consumers even less willing to buy the cars).