Bay Area Congresswoman Jackie Speier (D) of San Mateo told the auto industry they're not making enough of the kinds of cars that the American public wants, like fuel efficient vehicles.
The Big Three automakers say this is the worst downturn in auto sales in 15 years.
Congresswoman Speier said General Motors, Ford and Chrysler have done little to create more demand for their cars.
"All of this to me makes no sense at all if we don't create a demand for these vehicles and the American people are damn mad, they do not want us to bail out this industry," said Speier.
"They are going to be very mad when unemployment reaches nine percent, they are going to be really made when unemployment reaches 12 percent, if we allow the most important industry in this country to disintegrate," said Jeffrey Sachs, Ph.D., director of Columbia University's Earth Institute.
The Big Three automakers are asking for $34 billion in government loans. On Friday, Congresswoman Speier suggested a tax credit for consumers who buy fuel efficient cars, as a way to help the auto industry.
Yesterday GM's CEO arrived at the congressional hearings in a 2010 Chevy Volt, an electric car, a sign they were moving in that direction. But some say they're fallen behind. Paul Guyzk is the co-founder of Three Prong Power which came up with a way to upgrade the Toyota Prius.
"I certainly agree, a lot of people feel the American companies fell asleep the last few years and if they had built a better product, people would start buying it," said Guyzk.
Three Prong Power converts a Prius to a plug-in by adding a bigger battery that can be recharged to get more gas free miles. The cost is $6,700. But just as the Big Three want help from Congress, the electric car industry says they could also use a boost.
"We're here now selling now. What they are selling are concept cars and usually it takes about seven years to get a car from the drawing board on to the streets for mass production," said Mark Korchin, the owner of Green Motors.
Under the Bush administration, people who buy electric cars can get a tax credit, but the electric car industry says more incentives are definitely needed.