Michigan has a fact sheet which relates to the EFM legislation. The sheet is a little vague with regard to the actual abilities of the EFM, but hits key points directly:

Despite the misinformation being spread by the media and on the Internet, the legislation does not give the governor the ability to remove elected officials at will. Claims that it does are simply not true.

• The legislation includes a series of triggers, one of which must occur before a review of a local unit's finances is even conducted, such as failure by the local unit of government to pay creditors or make timely pension contributions.
  
• Even if an emergency manager is put in place, local elected officials can only be removed from office if they refuse to provide information or assistance.
  
• The governor already has - and has had - the ability to put an emergency financial manager in place since 1988.
  
• The governor already has - and has had - the ability to remove elected officials for failing to do their duty or for corruption. This power was established in Michigan's 1963 constitution.

Worth a look, and a later follow up.  One particular quote worthy of note:

"Bankruptcy is a much bigger threat to collective bargaining."