By Soyoung Kim

WARREN, Mich., April 16 (Reuters) - When hundreds of retired auto workers packed the union hall in this working class suburb earlier this week, there were more questions than answers about the fate of General Motors Corp GM.N.

The only consensus was on one point: If the 100-year-old industrial icon is pushed into bankruptcy, it will be GM's bondholders, not its workers, who are to blame.

"Bondholders are the ones that hold things up. That's why the union's holding up," said Pat Fagan, retiree chapter chairperson for the United Auto Workers union Local 160, which represents hourly retirees from a GM technical center.

Under the threat of a government-financed bankruptcy, GM is under pressure to cut $28 billion of unsecured debt by two-thirds and pay half of its $20 billion of funding still due to a union healthcare trust in equity, rather than cash.

The debt restructuring has brought bondholders and the union to a standoff. With a limited pie available, a bigger recovery for bondholders would mean less for retirees.

Fagan, who retired in 1991 after 31 years with GM, said he and other retirees were open to the restructuring of the healthcare trust if it meant that GM could avoid bankruptcy.

The trust, the Voluntary Employee Beneficiary Association (VEBA), was the centerpiece of a contract the UAW and GM reached in 2007 that made the automaker more labor cost competitive.

Those concessions and others in 2005 helped cut GM's retiree healthcare liability by about 40 percent, justifying a higher payout to the UAW, the union has said.