Keeping The Auto Industry On Track

(CBS)  With car sales across the country slowing to a dead stop, America's carmakers could soon find themselves running on empty, CBS News correspondent Cynthia Bowers reports.

By some estimates, General Motors is burning through $1 billion a month, and both it and Chrysler could be broke by next summer.

How bad is it? So far this year:

Ford's sales are off 19 percent

GM's are down 20 percent

Chrysler's sales have slid a staggering 26 percent

And in 2008 alone the three U.S. automakers have cut more than 48,000 jobs.

Desperate to stay afloat, GM and Chrysler are talking about merging - and are asking for a big government bailout to help do it.

"Without government help, GM - and possibly Chrysler - it's likely they would need to file for bankruptcy protection," said David Whitson, a Morningstar Auto Analyst.

The estimated cost is $10 billion federal dollars and a loss of 40,000 jobs -- that's one-fourth the workforce.

Neither company is talking publicly, but the White House confirms they are talking.

"The automakers have been in contact with us; we've been talking about it on various levels," said White House press secretary Dana Perino.

That stakes for the economy are massive: 4.5 million people, one in 30 American workers, have jobs in the auto industry. Fourteen million jobs are in some way connected to the car business. So the fear is that the big three are just too big to let fail.

The government has stepped in before.

You may recall in 1979 it bailed out Chrysler and gave the company time to develop what became its cash cow, the minivan. But today's global marketplace is much more competitive, and understandably, autoworkers are on edge.

The auto industry has helped power the economy for 100 years now, but experts say it's been headed the wrong way for so long, even with a bailout, it could take decades to get back on the right track.

[jjwalken]

Yup one more american nightmare on main street..yet the big bosses still make millions while rome burns...thanks guys...keep up the good work..oh by the way will the gov.take an ownership position with these guys also???

[avigil2]

The electric car needs to be revisited. And who the H*E*L*L killed it in the first place?

[maxjacob]

The UAW union is supposed to reperesent, look out for, and assist in, the wellbeing of their members. Well, this is their chance. I have not seen any pressence of of the UAW union on television. For instance, asking the public to save 4.5 million jobs of their fellow citizens (quote from the news article: "That stakes for the economy are massive: 4.5 million people, one in 30 American workers, have jobs in the auto industry") by considering/asking to buy more Amerian cars. -- What are the union fat cats paid for?

[ahsay2]

First we bailout bank CEO''s and now it''s the automaker CEO''s. I''m wondering when the American public will get a bailout, so we can pay our bills and get free vacations and deep muscle massages? Anyone have an idea?

[Gary Kempf]

It is time the UAW and executives of the big three learn some valuable lessons of economics.

[eddom949]

It was a Prophet, then, who said years ago "Let''s start at the top and work down from there," regarding the layoffs.

[u-r-right]

I''m convinced cars were intentionally built cheap and unreliable from between the mid 70''s up through the mid 90''s. Times were good there for a while. Our love affair with the car allowed the car industry to thrive and do whatever they wanted. Now that modern times demand change, the U.S. auto industry can;t adapt and/or keep up with the foreign competition.