"It's almost like seeing a guy show up at the soup kitchen in high-hat and tuxedo."

That's how one lawmaker described the chief executives of the Detroit automakers' "stone-cold deafness" when they flew by corporate jets to Washington D.C. in search of a bailout, the Washington Post reports.

Most can agree that it was probably not the best idea for three CEOs pleading for federal bailout money in D.C. to arrive on three corporate jets. But thoughtless symbolic gestures and nasty PR aside, should American automakers receive a $25 billion check from taxpayers?

Should the United States government step in and save the former titans of industry, or let market forces take their course?

There was a time, not that long ago in fact, when Detroit automakers and the United Auto Workers (UAW) had so much clout that working their will on Congress was relatively easy. Today things are much different. General Motors Corp., Ford Motor Co. and Chrysler LLC — known for decades as the Big Three — have endured challenging times before, but nothing like the situation they face today.

Between falling sales, an oil shock and a liquidity crisis, with their Asian competitors selling more fuel-efficient, smaller cars, the Big Three's chief executives have turned to the United States government for not one but two bailouts.

The $25 billion the executives recently requested in low-cost "bridge" loans were to help the automakers weather the economic downturn. The money would have been on top of the $25 billion loan package Congress approved this fall to help the Detroit automakers modernize plants.

A measure of the automakers' desperation can be found in one of the arguments against the second taxpayer bailout: that even the combined total in loans might not be enough to keep them alive — never mind enough to move them ahead.

Last week, GM CEO Rick Wagoner disclosed that his company was seeking between $10 billion and $12 billion of the requested $25 billion in emergency funding from the government. Ford CEO Alan Mulally said that his company was seeking $7 billion to $8 billion, and Chrysler CEO Robert Nardelli said that his company was seeking $7 billion. (Source: DowJones)

GM, Ford and Chrysler consumed nearly $18 billion in cash last quarter, and the leaders of GM and Chrysler both said that they're at risk of running out of money soon without more federal assistance. Analysts have said GM and Chrysler could run short of cash by the end of the year.

By the time a deeply skeptical House financial services committee had finished grilling Wagoner, Mulally and Nardelli last Wednesday, it was clear the Big Three would go home empty-handed, writes the Los Angeles Times.

Indeed, last week the new rescue plan stalled on Capitol Hill, opposed by the current Bush administration and Republicans in Congress who don't want to dip into the Treasury Department's $700 billion financial bailout program to come up with the new $25 billion in loans.

An alternative proposed by the White House would have let the car companies take $25 billion in loans recently approved to develop fuel-efficient vehicles. The cash from this alternative source would have gone towards more immediate needs, tiding over the automakers financially until President-elect Barack Obama takes office in January. The White House said that it did not want the U.S. auto industry to fail but stressed that it should use already available financing rather than new assistance funds. In the Senate, Democrats discussed but rejected this GOP-favored option.

Now it is possible that "any help for automakers will have to wait until 2009, when Obama takes office and the Democrats increase their majority in the Senate," according to the Associated Press. The president-elect has said that "he believes aid is needed but that it should be provided as part of a long-term plan for a 'sustainable U.S. auto industry' — not simply as a blank check."

While political leaders, for the most part, said they recognize the industry's importance, they were also quick to emphasize that they're not convinced giving the companies billions of dollars more would be enough to keep the companies out of trouble for very long.

"I am not going to turn my back on the working men and women of America," said Rep. Joe L. Barton (R-Texas), who has a GM plant in his district. "However, throwing billions of taxpayer dollars at an ailing industry won't necessarily cure the problem."

"It is like taking your kids' college education fund and spending it on your credit card bills," House Speaker Nancy Pelosi (D-Calif.) said.

But Detroit now has one more chance to make its case. Senate Majority Leader Harry Reid (D-Nev.) on Thursday raised the prospect of calling the Senate back into session in December if Ford, GM and Chrysler come up with a new plan.

Failing to convince Congress last week that they deserve emergency financial assistance to avoid bankruptcy, the U.S. carmakers have until Dec. 2 to explain their financial position and submit "credible" financial plans to lawmakers for spending up to $25 billion in government money, including how they plan to spend the money and the assumptions behind their assurances that any loan will be paid back. The required plan also includes vows for "significant sacrifices" by top executives.

In other words, the companies now have exactly one week to come up with proof that they won't blow the money if additional government aid is provided.

All Detroit automakers have committed to sharing their plans with Congress, but were seeking more guidance about how much detail they would need to share.

For two divergent views on the subject, and to get your own thinking sharpened on this matter, check out today's The Bailout Debate: For the Rescue and The Bailout Debate: Against the Rescue.

Resources

GM Seeks $10 Billion-$12 Billion Of $25 Billion Loan Plan; Ford Seeks $7 Billion-$8 Billion
by Siobhan Hughes
Dow Jones Newswires, Nov. 18, 2008

Paulson Rules Out Aid to Carmakers Under Rescue Plan
Agence France-Presse, Nov. 12, 2008

White House Wants Auto Industry to Use Available Aid Funds
Agence France-Presse, Nov. 17, 2008

Big 3 Carmakers Beg for $25B, Warn of Catastrophe
The Associated Press, Nov. 19, 2008

Showdown Looming in Congress over Automaker Rescue
The Associated Press, Nov. 16, 2008

Auto Aid Could Get Second Chance
by Justin Hyde
Detroit Free Press, Nov. 20, 2008

Senate's Reid Says No Deal Yet on Bailout for Big Three
by Robert Schroeder
MarketWatch, Nov. 20, 2008

Auto industry survival in hands of Congress
by Todd Spangler and Justin Hyde
Detroit Free Press, Nov. 16, 2008

Ford: Half of U.S. states would lose 3,000-plus jobs in auto collapse
by Sarah A. Webster
Detroit Free Press, Nov. 17, 2008

Auto bailout: Showdown
by Chris Isidore
CNNMoney.com, last updated Nov. 24, 2008

Clout Has Plunged for Automakers and Union, Too
by Micheline Maynard
The New York Times, Nov. 17, 2008

CAR Research Memorandum: The Impact on the U.S. Economy of a Major Contraction of the Detroit Three Automakers
by David Cole, Sean McAlinden, Kristin Dziczek and Debra Maranger Menk
Center for Automotive Research, Nov. 4, 2008

An Estimate of Car Jobs in Jeopardy Is Dubious
by Catherine Rampell
The New York Times, Nov. 18, 2008

South Could Gain as Detroit Struggles
by Paulo Prada and Dan Fitzpatrick
The Wall Street Journal, Nov. 20, 2008

Back on Capitol Hill (video)
Automotive News, Nov. 19, 2008

Advantage of Corporate Bankruptcy Is Dwindling
by Jonathan D. Glater
The New York Times, Nov. 18, 2008

Come on and Save Me
by Daniel Politi
Slate, Nov. 19, 2008

Let Detroit Go Bankrupt
by Mitt Romney
The New York Times, Nov. 18, 2008

Invidious Comparisons
by Megan McArdle
The Atlantic, Nov. 11, 2008

How to fix the Big Three
by Chris Isidore
CNNMoney.com, Nov. 17, 2008

Auto Execs Fly Corporate Jets to D.C., Tin Cups in Hand
by Dana Milbank
The Washington Post, Nov. 20, 2008

Big 3 Fail to Close Deal on Bailout
by Jim Puzzanghera and Richard Simon
Los Angeles Times, Nov. 20, 2008

Earn the Bailout, Detroit
by Douglas Olin
Los Angeles Times, Nov. 12, 2008

How to Fix a Flat
by Thomas L. Friedman
The New York Times, Nov. 11, 2008

House Auto Legislation Will Protect American Jobs While Demanding Long-Term Restructuring of Auto Industry for Viability and Energy Independence
House Committee on Financial Services, Nov. 17, 2008

Is Detroit Worth Saving?
by Joseph Romm
Salon.com, Nov. 12, 2008

Facing a Slowdown, China's Auto Industry Presses for a Bailout From Beijing
by Keith Bradsher
The New York Times, Nov. 18, 2008

EU Considers Aid for Auto Makers
by Gabriele Parussini and Andrea Thomas
The Wall Street Journal - Europe, Nov. 18, 2008

Detroit on the Defensive
by Tim Jones
The Chicago Tribune, Nov. 23, 2008

Democrats to Automakers: Prove You Can Repay $25 Billion
by Justin Hyde
Detroit Free Press, Nov. 22, 2008

Romney Adamantly Against Auto Industry Bailout
The Associated Press, Nov. 20, 2008

Mulally Defends Ford's Actions
The Associated Press, Nov. 18, 2008

Auto Industry Survey
Peter D. Hart Research Associates, Inc., Nov. 11-12, 2008

48% Say Failure of GM Best for the Economy
Rasmussen Reports, Nov. 20, 2008