Big Three Automakers Bankruptcy not Bailout

WASHINGTON (New York) - It's been a bumpy road for Detroit's Big three automakers for the past few years. But it may get worse. Some experts fear that Ford, GM and Chrysler sales pluging as fewer consumers buy gas-guzzling pickups and SUVs. It could be forced to head for bankruptcy.

The White House said Financial bailout is considering a so-called prepackaged bankruptcy plan for General Motors and Chrysler. And It's move that many congressional Republicans favor, but the automakers and some analysts say could lead to the companies' collapse.

Image Of President Bush

Last week, General Motors reported a $15.5 billion second quarter net loss. While its operating loss was only $6.3 billion, that's still more than the market value of the company.

GM Motors loss followed an $8.7 billion loss at Ford Motor and came on the same day that the industry reported a 13% drop in sales. Its worst month in 16 years.

In the case of Ford, GM and Chrysler, a Chapter 11 bankruptcy might allow the auto manufacturer to modify union contracts that were negotiated years ago in a different economic climate. Union members and their supporters in Congress will obviously balk at losing benefits. But you can be sure that there will be strings attached to any bailout.

President Bush, asked earlier about an auto bailout. Bush said he hadn't decided what he would do, but didn't want to leave a mess for Barack Obama, who takes office a month from Saturday. A White House decision on helping the troubled automakers could come as early as today.