The auto industry is one of the country's biggest employers, providing work for 1 million Americans. Its demise would have serious consequences for an already weak economy.
"In its weakened condition that the economy's in, a total collapse of the American automobile industry would do more damage than not doing anything," Rep. Barney Frank said.
No one seems to know exactly how much money Detroit's "Big 3" would need to survive the current crisis.
Former Labor Secretary Robert Reich, now a professor of public policy at University of California, Berkeley, thinks a cash infusion and bankruptcy restructuring might be the solution.
"Maybe the best combination is Chapter 11 reorganization with some government help to restructure the industry, to make sure the people who are there don't get fired, to get fuel efficient cars, to try to create a new auto industry that is really, truly competitive," Reich said.
Critics argue several airlines filed for bankruptcy and survived; perhaps automakers should too.
"I think it would make more sense for them to maybe follow the line that many of the airlines did, which is to go into Chapter 11, realign with all the parties getting together - unions, management, shareholders, debt holders," Ken Winans of Winans International Investments said. "All those parties get together and say, look we need to realign everything, we need to rip up the old terms and conditions; [and find] what's sensible under this new environment."
Michigan's governor is pleading to tap the $700 bailout fund because the car makers are victims of the credit freeze. She wants $10 billion for public works projects to create jobs.
"This is an industry that was in restructuring and now can't borrow, and consumers are not buying and consumers don't have access to credit," Gov. Jennifer Granholm said.
Detroit's automakers survived the Great Depression, but now their fate is uncertain. Reich's father witnessed that, and thinks he knows why the Depression was different.
"Well, the automakers didn't have Japanese competition then," Ed Reich, said.
