What happens to GM, Ford, or Chrysler when they "fail"? Their Intellectual Property, facilities, subsidiary companies, etc. don't just get sucked into a black hole never to be seen again. Somebody (likely a Honda, Toyota, VW, etc.) would buy them, if only to break up the pieces to keep what they could use and sell off the rest. (I seem to recall reading that new auto sales are not the majority of GM's revenues!)

Sure, all of the current stock, option, and bond holders would suffer almost total loss. (That would include most of the top management, and well deserved!) But I suspect a lot of the brands would be resurrected by their new owners, and a lot of the employees would be hired to do that. (But maybe without union contracts, and maybe in a different state.) Also, a lot of the old company's suppliers would supply parts and equipment for the new versions.

American's would not stop buying cars just because the big three folded. They may stop because they are broke, and can't get financing! But sooner or later the economy will stabilize, people will go car shopping, and somebody will want to make some money by lending those folks the price of a new car or truck.

If the new owners of the GM, Ford, and Chrysler brands can supply vehicles that are price competitive, run efficiently on whatever fuels are available, and are well built, then they will succeed.