Showdown looms over auto bailout plan.(Inside Track)

The pleading for a financial bailout of the U.S. auto industry is becoming more widespread and insistent, with supporters of the bailout claiming that Detroit's Big Three (General Motors, Ford, and Chrysler) are too big to fail.

Supporters of GM, such as the Center for Automotive Research, claim that bankruptcy could eliminate 2.5 million jobs and $125 billion in personal income in just the first year. Over three years, the government's tax take could fall by more than $108 billion. That is far more than the $25 billion bridge loan that GM is requesting. It's that kind of arithmetic that has persuaded House of Representatives Speaker Nancy Pelosi to consider just such a loan during the post-election, lame-duck session of Congress.

Pointing to the airline industry, others argue that bankruptcy would not be nearly as traumatic as GM insists. Under bankruptcy protection, GM could renegotiate labor contracts, trim the health and pension benefits costs that undermine its competitiveness against foreign automakers, and override state laws that make it difficult to close unprofitable dealerships. Analysts claim that, just as the ...