Car Talk.(The Talk of the Town)(automotive industry)

The Secretary of Transportation's report to Congress begins on a dark note. "Over the past year, the domestic auto industry has experienced sharply reduced sales and profitability, large indefinite layoffs, and increased market penetration by imports," it states. "The shift in consumer preferences towards smaller, more fuel-efficient passenger cars and light trucks . . . appears to be permanent, and the industry will spend massive amounts of money to retool to produce the motor vehicles that the public now wants." The revenue to pay for this retooling, though, will have to come from sales of just the sort of cars that the public is no longer buying--a situation, the report observes, bound to produce "financial strain."

"To improve the overall future prospects for the domestic motor vehicle manufacturers, a quality and price competitive motor vehicle must be produced," the report warns. "If this is not accomplished, the long term outlook for the industry is bleak."

The Secretary's report was delivered to Congress in 1980, a year after what may soon become known as the first Chrysler bailout. Depending on how you look at things, the report was either wrong--three years later, Chrysler returned to profitability--or prescient.

Last month, when the chief executives of the Big Three flew to Washington in their corporate jets to plead for public money, the result was embarrassing on almost every level. During two days of congressional hearings, the C.E.O.s were unable to answer the most basic questions, such as how they had arrived at the sum they were asking for--twenty-five billion dollars--or why it would be better to give it to them rather than to their customers, or whether, if they got it, it would be enough to keep them solvent. The three didn't seem to think it necessary to present Congress with any documentation showing how they would spend the money, and they were sent back to Detroit like delinquent schoolboys. "Until they show us the plan, we cannot show them the money," House Speaker Nancy Pelosi told reporters. That day, Ford's stock price sank to a low of $1.01. "You want fries with that?" the Times' Timothy Egan asked.

The challenge facing the Big Three as they return to Washington, presumably this week, is formidable. They have tried to cast themselves as victims, suffering from the mistakes of others, but this is a hard act to pull off.

"They are seeking treatment for wounds that, I believe, to a large extent were self-inflicted," Senator Christopher Dodd, of Connecticut, the chairman of the banking committee and a proponent of a bailout, observed. Senator Carl Levin, of Michigan, one of the industry's staunchest supporters, pointed to the companies' habit of "paying their executives and their workers too much," to their uneven quality record, and to their aversion to innovation. "Blame them if you want," he said. By the end of the second day of hearings, lawmakers were openly taunting the C.E.O.s. Representative Peter Roskam, of Illinois, asked the three if, in return for federal assistance, they would be willing to reduce their salaries to a dollar a year.

"I don't have a position on that today," G.M.'s ...