Even With a Bailout, Can Chrysler Hang On?

(MoneyWatch)  An analyst for research and consulting firm CSM Worldwide made a point I made in this space recently, which was that Chrysler is the smallest and weakest of the Detroit Big Three, with the cloudiest future.

So far, that rather obvious fact seems to have escaped Congress in the political debate over the proposed U.S. auto industry bailout, but it's starting to crop up.

Analyst Michael Robinet was widely reported to have told the Detroit-based Automotive Press Association on Dec. 10 that bailout or no bailout, Chrysler is too small to prosper long-term, and that Chrysler's future is probably a "controlled wind-down" of its operations.

Robinet's remarks were reported on Dec. 11 in The New York Times, the Detroit Free Press and plenty of other news outlets, just as the debate over a U.S. auto industry bailout goes into high gear.

The U.S. House approved emergency loans for GM and Chrysler on Dec. 10, racing a deadline of Dec. 31. By that time, GM and Chrysler have warned they may not have enough cash to pay the bills. In a statement on its web site, GM thanked the House and its leadership for the vote.

The auto industry bailout now moves to the Senate, where opposition by more than a handful of Republican senators could kill the proposal. Democrats, who generally support the bailout, have only a one-vote majority in the Senate, but the measure needs at least 60 votes to overcome a potential Republican filibuster.

"We encourage the Senate to act soon so that we can continue at full speed on the restructuring and advanced technologies plans that will form a stronger, more viable GM," said GM in its written statement.

Chrysler needs fast action, too, while Congress still treats the Detroit Big Three as a single entity.