From NYTimes.com:

The Pontiac Assembly Center in Pontiac, Mich., is a massive, low-slung structure of concrete and corrugated green steel that squats conspicuously among the many strip malls that line one of the city’s main thoroughfares, South Opdyke Road. Locals refer to the three-million-square-foot factory, which makes Chevrolet Silverado and GMC Sierra pickup trucks, as Plant 6, because when it opened in 1972, it was the sixth General Motors manufacturing facility in this city, 25 miles north of downtown Detroit. At the time, General Motors was the world’s largest automaker. It dominated the American market, manufacturing half of the vehicles sold in the U.S. As recently as 2003, Plant 6 was running three consecutive eight-hour shifts, employing 3,000 people and making 1,300 trucks a day.

Today, Pontiac Assembly is the city’s last working auto-assembly plant, and like many of America’s car factories, it is operating at a greatly diminished capacity.

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PHOTOS: Detroit, A City Of Remarkable Ruin

White House Questions Viability Of GM, Chrysler

Class Warfare, American-Style

President Barack Obama pushed a humbled General Motors Corp. into bankruptcy on Monday and said the federal government will act as “reluctant shareholder” when it assumes a 60 percent ownership of the smaller carmaker that emerges.

The president said he hopes GM — once a proud symbol of American capitalism — would emerge quickly from bankruptcy court, and pledged up to $30 billion in additional federal assistance to help it get on its feet.

The government’s partial stake in GM comes on top of a far smaller ownership of Chrysler LLC, as well as significant federal equity in banks, the AIG insurance giant and two mortgage industry titans — all victims of an economic crisis unrivaled since the Great Depression.

Republicans lobbed questions in Obama’s direction even before he finished speaking.

“The only thing it makes clear is that the government is firmly in the business of running companies using taxpayer dollars,” said House Republican Leader John Boehner of Ohio.

“Does anyone really believe that politicians and bureaucrats in Washington can successfully steer a multinational corporation to economic viability? It’s time for the administration to fully explain what the exit strategy is to get the U.S. government out of the board room once and for all,” Boehner said.

But the president said the actions were part of a “viable, achievable plan that will give this iconic company a chance to rise again.”

Speaking at the White House, where he was flanked by Cabinet secretaries and top economic advisers, he added, “What I am not doing, what I have no interest in doing, is running GM.”

The president said auto executives “will call the shots and make the decisions about turning this company around.” He said the government would refrain from playing a management role in all but the most critical areas.

“Our goal is to help GM get back on its feet … and get out quickly,” he said of the federal government.

Neither Obama nor his spokesman offered an indication of how long the government’s involvement would last. “I don’t know that there is a timeline,” said Robert Gibbs, the White House press secretary.

The carmaker’s CEO, Fritz Henderson, said at a news conference in New York, “This new GM will be built from the strongest parts of our business, including our best brands and products.” He took over at the helm of the firm with the approval of the Obama administration, which engineered the ouster of his predecessor, Rick Wagoner.

Obama spoke as GM entered bankruptcy court at the same time Chrysler was looking to emerge after a two-month reorganization. Over the weekend, a bankruptcy judge gave the No. 3 automaker approval to sell most of its assets to Italy’s Fiat, part of a plan under which the U.S. government will own somewhat less than 10 percent of the firm.

Ford Motor Co., the other large U.S. automaker, has said it can weather the current economic and industry crises on its own.

Obama said the coming restructuring will “take a painful toll on many Americans.” GM announced during the day that it would permanently close nine more plants and idle three others, steps affecting as many as 20,000 workers.

Obama cited Chrysler’s experience in bankruptcy court as a model of how GM could fare.

“Some said a quick bankruptcy was impossible … they were wrong,” he said.

He added that unnamed critics predicted car sales would “fall off a cliff,” and added, “they were wrong.” Chrysler sold more cars in May than it did in April.

The outcome, he said, is “dramatically better than the one we found when we began.”

Looking ahead, he said, GM will be prodded at every juncture by the administration’s top officials.

The announcement marked the latest step in a series of measures Obama has taken since he became president to salvage an industry that has been part of the American landscape for a century.

Earlier in the year, he rejected a restructuring plan submitted by GM’s ownership, and ordered its leaders to try again. They did, under the direction of administration officials, and the result is a blueprint in which hundreds of dealerships will be closed and familiar model names jettisoned. Officials have estimated the new GM should be profitable when Americans are buying about 10 million vehicles a year. The company that entered bankruptcy court needed U.S. auto sales to stay at an estimated 16 million units a year to make a profit.

Obama stressed that GM’s workers and its investors had both made sacrifices. The United Autoworkers Union agreed in recent days to numerous concessions, and a majority of investors agreed to accept less than the paper value of their holdings. The administration, sensitive to charges that it favored the UAW, said the terms accepted by the unions were harsher than what had been proposed by the Bush administration.

Obama’s assurances about a temporary federal ownership were seconded by Senate Majority Leader Harry Reid, D-Nev., who said the president’s “decision to take a short-term stake in General Motors is driven by our nation’s shared interest in ensuring the American auto industry can survive.”

Interest in Congress was intense, though, and the Senate Commerce Committee announced it was summoning top executives from GM and Chrysler to a hearing on Wednesday into their firms’ plans to close hundreds of dealerships as part of an industry restructuring.

Chrysler has said it will close nearly 800 dealerships. GM has disclosed plans to shutter about 1,100.

A day after Chrysler LLC told a quarter of its dealers that it won’t renew their contracts, owners of General Motors Corp. dealerships are awaiting word on whether they will be next.

GM said it will notify 1,100 U.S. dealers on Friday that their franchise agreements will not be renewed. Dealers expect to hear either by telephone or FedEx letters that will begin arriving Friday morning.

The cuts will come just a day after crosstown rival Chrysler announced it was dropping 789 of its roughly 3,200 dealerships by around June 9. Both companies have too many dealerships for too few sales are slashing costs as they race to restructure.

The GM dealer cuts are likely to have a much greater impact than Chrysler’s. While many Chrysler dealers also sell other brands and will stay open after losing their franchises, a large number of GM dealers sell only GM vehicles. So if their franchises are revoked, they run a greater risk of closing for good.

In both cases, the cuts will cost thousands of jobs, create holes in local tax bases, eliminate community pillars and create economic ripple effects across the country.

Chrysler is operating under bankruptcy protection, so it is likely to have an easier time tearing up its franchise agreements with its dealers than GM. A hearing is scheduled for June 3 in U.S. Bankruptcy Court in New York for the judge to determine whether to approve Chrysler’s motion to fire its dealers.

Chrysler executives said Thursday the company is trying to preserve its best-performing dealers and eliminate ones with the weakest sales. More than half of the dealerships being eliminated sell less than 100 vehicles per year, they said, and account for 14 percent of U.S. sales.

The National Automobile Dealers Association says about 40,000 people work at the affected Chrysler dealerships. Many will keep their jobs, but their dealerships will be left to sell only the other brands in their showrooms or used cars.

President Barack Obama refused further long-term federal bailouts for General Motors and Chrysler, saying more concessions were needed from unions, creditors and others before they could be approved. He raised the possibility Monday of controlled bankruptcy for one or both of the beleaguered auto giants.

At the same time, eager to reassure consumers, Obama announced the federal government would immediately begin backing the warranties that new car buyers receive — a step designed to signal that it is safe to purchase U.S.-made autos and trucks despite the distress of the industry.

In a statement read at the White House, Obama said he was “absolutely committed” to the survival of a domestic auto industry that can compete internationally. And yet, “our auto industry is not moving in the right direction fast enough,” he added.

With his words, Obama underscored the extent to which the government is now dictating terms to two of the country’s iconic corporations, much as it has already taken an ownership stake in banks, the insurance giant AIG and housing titans Fannie Mae and Freddie Mac.

In an extraordinary move, the administration forced the departure of Rick Wagoner as CEO of General Motors over the weekend, and implicit in Obama’s remarks was that the government holds the ability to pull the plug on that company or Chrysler.

Uncertainty about the industry’s fate sent stocks tumbling, with the Dow Jones industrial average losing as much as 300 points in midday trading.

Ford Motor Co., the third member of the Big 3, has not requested federal bailout funds, and was not included in the president’s remarks.

The Bush administration late last year approved $17 billion in federal funds to help GM and Chrysler survive. It also demanded both companies submit restructuring plans that the Obama administration would review.

Even as he pronounced their effort unsatisfactory, the president said the administration will offer General Motors “adequate working capital” over the next 60 days to produce a reorganization plan acceptable to the administration.

He said Chrysler’s situation is more perilous, and the government will give the company 30 days to overcome hurdles to a merger with Fiat SpA, the Italian automaker. If they are successful “we will consider lending up to $6 billion to help their plan succeed,” Obama said.

He also announced several steps to reassure consumers, and improve the chances that U.S. automakers will be able to sell their cars and trucks.

The president said the government will now stand behind warrantees issued by the carmakers, a sweeping new guarantee that some in Congress had sought.

He also noted that the economic stimulus legislation he recently signed allows the purchasers of new domestic cars to deduct the cost of any sales and excise taxes. Obama said this provision could “save families hundreds of dollars and lead to as many as 100,000 new car sales.”

He also said funds ticketed for the purchase of new vehicles for government agencies would be spent as quickly as possible. The president was flanked by numerous administration officials as he spoke, including Treasury Secretary Tim Geithner.

Obama spoke at the White House with U.S. automakers at yet another crossroads. As the president noted, the industry has shed more than 400,000 jobs in the past year as the recession took hold. Officials announced last week bailout funds would be made available to companies that supply the automakers, an attempt to keep them afloat.

Obama said he is committed to the survival of an auto industry — on terms that will allow it to compete internationally.

“But we also cannot continue to excuse poor decisions,” he said. “And we cannot make the survival of our auto industry dependent on an unending flow of tax dollars.”

He also said some of the industry’s progress has scarcely been noticed. He mentioned that the North American car of the year in 2008 was produced by GM.

“Let me be clear: The United States government has no interest in running GM; we have no intention in running GM,” Obama said.

But that was at the same time he was formally announcing the departure of Wagoner, whom administration officials forced into retirement on Sunday in preparation for the president’s remarks.

“This is not meant as a criticism of Mr. Wagoner, who has devoted his life to this company; rather it’s a recognition that it will take a new vision and new direction to create the GM of the future,” Obama said.

Other changes at GM include new directors on its board. Fritz Henderson, GM’s president and chief operating officer, became the new CEO. Board member Kent Kresa, the former chairman and CEO of defense contractor Northrop Grumman Corp., was named interim chairman of the GM board.

In a statement, Henderson said the manufacturer would work “to make the fundamental and lasting changes necessary to reinvent GM for the long term.”

Chrysler Chairman Bob Nardelli sought to assure customers, dealers, suppliers and employees that the automaker “will operate ‘business as usual’ over the next 30 days,” while working closely with the government and Fiat to secure the support of stakeholders.

The Obama move comes amid public outrage over bonuses paid to business leaders and American International Group executives — set against a severely ailing economy.

GM failed to make good on promises made in exchange for $13.4 billion in government loans. Chrysler, meanwhile, has survived on $4 billion in federal aid during this economic downturn and the worst decline in auto sales in 27 years. In progress reports filed with the government in February, GM asked for $16.6 billion more and Chrysler wanted $5 billion more.

GM owes roughly $28 billion to bondholders. Chrysler owes about $7 billion in first- and second-term debt, mainly to banks. GM owes about $20 billion to its retiree health care trust, while Chrysler owes $10.6 billion.

GM and Chrysler employ about 140,000 workers in the U.S. In February, GM said it intended to cut 47,000 jobs around the globe, or almost 20 percent of its work force, close hundreds of dealerships and focus on four core brands — Chevrolet, Cadillac, GMC and Buick.

President Barack Obama is sending a blunt message to Detroit automakers: To survive _ and win more government help _ they must remake themselves top to bottom. Driving home the point, the White House ousted the General Motors chairman as it rejected GM and Chrysler‘s restructuring plans.

Obama is set to elaborate on that message Monday when he announces what his White House told reporters over the weekend: Neither GM nor Chrysler submitted acceptable plans to receive additional federal bailout money.

GM chairman Rick Wagoner became the most conspicuous casualty of that decision, forced out Sunday as the White House indicated Detroit must make management and other changes if it hopes to survive _ and that the Obama administration will have a hands-on role in those changes.

Michigan Gov. Governor Jennifer Granholm said Wagoner “clearly is a sacrificial lamb” who stepped aside “for the future of the company and for the future of jobs.” She spoke on NBC’s “Today” show Monday.

Obama said the companies must do more to receive additional financial aid from the government.

“We think we can have a successful U.S. auto industry. But it’s got to be one that’s realistically designed to weather this storm and to emerge _ at the other end _ much more lean, mean and competitive than it currently is,” Obama said on CBS’ “Face the Nation” broadcast Sunday.

Frustrated administration officials, speaking on condition of anonymity ahead of Obama’s announcement, said Chrysler has been given a 30-day window to complete a proposed partnership with Italian automaker Fiat SpA. The government will offer up to $6 billion to the companies if they can negotiate a deal before time runs out. If a Chrysler-Fiat union cannot be completed, Washington plans to walk away, leaving Chrysler destined for a complete sell-off.

Shawn Morgan, a Chrysler spokeswoman, declined to comment ahead of Obama’s announcement.

For GM, the administration offered 60 days of operating money to restructure. Officials say they believe GM can put together a plan that will keep production lines moving in the coming years.

New directors will now make up the majority of GM’s board. Fritz Henderson, GM’s president and chief operating officer, became the new CEO. Board member Kent Kresa, the former chairman and CEO of defense contractor Northrop Grumman Corp., was named interim chairman of the GM board.

“The board has recognized for some time that the company’s restructuring will likely cause a significant change in the stockholders of the company and create the need for new directors with additional skills and experience,” Kresa said in a written statement.

The Obama administration move comes amid public outrage over bonuses paid to business leaders and American International Group executives _ set against a severely ailing economy.

GM failed to make good on promises made in exchange for $13.4 billion in government loans. Chrysler, meanwhile, has survived on $4 billion in federal aid during this economic downturn and the worst decline in auto sales in 27 years. In progress reports filed with the government in February, GM asked for $16.6 billion more and Chrysler wanted $5 billion more. The White House balked and instead started a countdown clock.

Two people familiar with the plan said bankruptcy would still be possible if the automakers failed to restructure. Those officials spoke on condition of anonymity because they were not authorized to make details public.

An exasperated administration official noted that the companies had not done enough to reduce debt; in some cases, it actually increased during this restructuring and review process. GM owes roughly $28 billion to bondholders. Chrysler owes about $7 billion in first- and second-term debt, mainly to banks. GM owes about $20 billion to its retiree health care trust, while Chrysler owes $10.6 billion.

GM and Chrysler employ about 140,000 workers in the U.S. In February, GM said it intended to cut 47,000 jobs around the globe, or almost 20 percent of its work force, close hundreds of dealerships and focus on four core brands _ Chevrolet, Cadillac, GMC and Buick.

WASHINGTON – President Barack Obama says General Motors Corp., Chrysler LLC and all those with a stake in their survival need to take more hard steps to help the struggling automakers restructure for the future.

Obama, in an interview with CBS’ “Face the Nation” broadcast Sunday, said the companies must do more to receive additional financial aid from the government.

“They’re not there yet,” Obama said.

The president was set to announce a plan Monday for the government to provide more money in exchange for tough concessions from union workers, bondholders and others.

“We think we can have a successful U.S. auto industry. But it’s got to be one that’s realistically designed to weather this storm and to emerge — at the other end — much more lean, mean, and competitive than it currently is,” Obama said.

GM and Chrysler are surviving on $17.4 billion in government loans. They have been hard hit by the economic downturn and the worst decline in auto sales in 27 years. GM is seeking $16.6 billion more; Chrysler wants $5 billion more.

Obama said the government would require a “set of sacrifices from all parties involved, management, labor, shareholders, creditors, suppliers, dealers. Everybody’s gonna have to come to the table and say it’s important for us to take serious restructuring steps now in order to preserve a brighter future down the road.”

Both companies are trying to reduce their debt by two-thirds and persuade the United Auto Workers union to accept several cost-cutting measures.

Under the terms of a loan agreement reached during the Bush administration, GM and Chrysler are pushing the UAW to accept shares of stock in exchange for half of the payments into a union-run trust fund for retiree health care. They also want labor costs from the union to be competitive with Japanese automakers with U.S. operations.

Neither GM nor Chrysler have deals with the union on the trust funding or concessions from their debtholders and the administration has been trying to accelerate those efforts.

GM and Chrysler employ about 140,000 workers in the U.S.

Members of the president’s auto industry task force have said bankruptcy could be an option for GM and Chrysler if their management, workers, creditors and shareholders failed to make sacrifices. The conditions could be more stringent than the loan terms set by the outgoing Bush administration in December, officials have said.

GM and Chrysler face a Tuesday deadline to submit completed restructuring plans, but neither company is expected to finish their work. The administration’s plan would be designed to accelerate those efforts.

GM owes roughly $28 billion to bondholders. Chrysler owes about $7 billion in first- and second-term debt, mainly to banks. GM owes about $20 billion to its retiree health care trust, while Chrysler owes $10.6 billion.

In February, GM said it intended to cut 47,000 jobs around the globe, or nearly 20 percent of its work force, close hundreds of dealerships and focus on four core brands — Chevrolet, Cadillac, GMC and Buick.

Chrysler issued two scenarios in its February plan: one, as a distinct company, and the second, in an alliance with Italian automaker Fiat SpA. Fiat executives have talked to the task force about a proposal to acquire a 35 percent stake in Chrysler in exchange for small car technology, transmissions and other items that Chrysler has valued at $8 billion to $10 billion.

Chrysler said in its February report that it would cut 3,000 workers and eliminate three vehicle models, the Dodge Aspen, Dodge Durango and Chrysler PT Cruiser.

Given that the government is bailing out failed companies like AIG, Morgan Stanley and is considering bailing out Ford and General Motors shouldn’t they consider bailing out some the ailing Hip Hop companies.

Shouldn’t Ray Benzino and the Source be entitled to some of the $700 billion? Shouldn’t Master P get some money to rebuild his struggling No Limit Records? If Damon Dash was given one billion dollars surely he could make another Hov and go back to being the mega mogul he was 8 years ago.

If the Hip Hop industry fails it could have disastrous effects on the economy. When Hip Hop record labels start going out of business not only will rappers be out of jobs but so will managers, bodyguards, stylists, publicists, deejays, entourage members, A&R’s, and other label people.

If Hip Hop were to cease to be economically viable, it could have a domino effect on the whole economy. If rappers were to no longer have money other sectors like the strip club industry, the tacky platinum chain industry, and the rims industry would also go under. Rap magazines such as XXL, Ozone, The Source, and Vibe would all go out of business as would countless Hip Hop websites and blogs. If Hip Hop dies what would happen to all the radio stations where hip hop lives?

Hip Hop is definitely at a tipping point now. Even the once financial giant of G-Unit is forced to cut back product and lay off workers.If 50 Cent doesn’t receive some money from the government its very possible that we may never hear another Tony Yayo or Loyd Banks album.

Many people would argue that rappers and Hip Hop moguls have lived in material excess beyond their means, been arrogant and greedy, all while not being creative, innovative or even efficient. This may be true but so have the CEOs of Wall St. and Detroit. For years Morgan Stanley, Merryl Lynch, Goldman Sachs and Lehman Bros. have been giving large bonuses and salaries to their top level executives.

. The average salary for Morgan Stanley year was $655,000. Just like rappers, Wall Street executives would spend obscene amounts of money on strippers, cars, vacations and houses. How come their houses and cars aren’t being repossessed like all the rappers?

The reason Hip Hop went broke is the same reason that Wall Street and Detroit went broke. All of them paid CEO’s way too much money which was squandered on materialism. When things were going well they wasted their wealth and expected the economy to stay the same. Neither Wall St, Detroit or Hip Hop changed to fit the times, sticking with the same tired routine. Wall St. CEO’s kept buying up bad debt and counting it as cash on hand all the while grossly overpaying their executives with lavish bonuses. Detroit refused to join the 21st century, reproducing gas guzzling CEO’s while Honda and Toyota made fuel efficient hybrids.

If these companies are bailed out, the CEO’s should all resign and have their houses and cars repossessed like rappers do. They failed their, country, their employees and their stockholders. The culture of business in America must change. While right wingers might talk about changing labor laws, the problem is at the top and not the bottom.

In 2006 the CEO of Morgan Stanley got a 40 million dollar bonus on top of his salary. That’s enough money to pay the salaries of 1200 average American workers. In 2007, Ford paid their CEO 28 million dollars for four months of work. Given that the these CEO’s have by all accounts failed, shouldn’t they do the honorable thing and give back their money to the taxpayers and shareholders.

If the government is to bail out Wall St. and Detroit, it must treat the executives like rappers. Take all their assets, foreclose their homes and repossess their cars. Give their jobs to new business men with bright new ideas and strategies.

Of course, that wouldn’t be such a peril to us if those groups were a) willing to be held responsible for the lives of those individual participants who invest so much and b) accepted their failures as a personal fault as much as our failures. The established idea of credit (extended from the idea of slavery) is that your work will somehow credit you for future purchases and worth. Should your work fall short of the goods you’ve bought and acquired, you assume debt. If you cannot pay back that debt, you file for bankruptcy and start over, your name and credit damaged for some time. Somewhere between the history of using paper currency instead of traded goods to using promised paper currency, Americans accepted the ordeal of permanent debt to those larger institutions. Can’t pay for college? Take out loans. Can’t afford a home? Take out loans, and leverage your salary against them. Need to send your kids to school with a new car? Refinance that first loan you took out and increase debt with little thought to repayment. After all, what’s debt when you die?

This confused process of imaginary money has led us to the demolishing trend of today: personal and corporate responsibility have dissipated. But even more offensive, the government’s knee-jerk reaction has been to safeguard the ones at the top, save their failures topple our lives in total.

Never has the argument for reparations loomed so prominently.

The previously prevalent notion of leaving the mistakes of the past to bear out on your credit line has been tossed to the wayside for a more communal approach; specifically, rescuing every Bob and Barry CEO in the nation with a gentle billion-dollar nudge into continued prosperity. In fact, the rescue language has become so brisk in the mouths of the Pelosis, Reids, Bushes and Obamas that it seems we’d collectively panic if not for the concerted efforts of the Treasury and Federal Reserve to give our industries life. When the mortgage lenders went under, we feared we would lose any homes not fully paid for. As the banks crumbled, businesses and universities worried about the ability to secure loans for another quarter. The pervasive language of anxiety over our declining capitalism made it reasonable to say that government funds should (gasp) help the citizens of our nation…albeit the richest one percent of our citizens, but we had to start somewhere.

Naturally, we should look to the labor force that built the garrisons of industry during the Transatlantic slave trade. Enslaved Africans have been mired in our economic future since the merchant class of New England used their hands and tears to make colonial farms and banks profitable. The tobacco industry gave way to the cotton and textile industry gave way to the sharecropping industry, all of which yielded millions for corporations still existing today. Since that debt has never been repaid, neither in cash nor in resources, the government has its biggest mortgage crisis yet in addressing that history. As automakers fly in private jets with hands outstretched to cushion their already luxurious lives of spendthrift, where are the billions set aside for the descendants of slaves to recoup on their education debt? Where are the billion-dollar bailouts for the men and women who were denied opportunity until recently for their access into higher industry and government? The Native Americans slaughtered by disease and deprivation have only detached casino revenues (which never reach their depressed population), and Black Americans have some stake in sports and entertainment (until we even, says Jay-Z).

As much as Obama’s electoral victory presented us with a new model of racial politics — or the beginnings of new racial politics — we have yet to see the same sympathy for our cheated countrymen of color that’s been extended to reckless executives and tiresome financiers. Supposedly, we should feel proud that the CEOs of GM, Chrysler and Ford have (grudgingly) given up their exorbitant salaries for $1-a-year nominal fees. In fact, I would feel more heartened by that tipping of the scales if descendants of Asian-American railroad workers got their cash retributions for their opening of the Western frontiers. Or, I would feel encouraged if the Mexican workers responsible for every part of our bottom-rung jobs were fairly rewarded with health benefits. As we make steps to provide safety nets for those elites who have toddled with their great-grandparents’ inheritance dollars, we should also consider those of us who never had the advantages (and never expected any), but have braved past those obstacles to create new wealth. Since reparations is an accursed term, I’m comfortable with just labeling it a “bailout” for now.

Unless one of Detroit‘s other Big Three auto companies goes bust, Ford expects to have enough money to make it through next year without government help, it said in a plan that projected the firm will break even or turn a pretax profit in 2011.

Detroit’s automakers, making a second bid for $25 billion in funding, are presenting Congress with plans Tuesday to restructure their ailing companies and provide assurances that the funding will help them survive and thrive.

General Motors Corp., Ford and Chrysler LLC said they would refinance their companies’ debt, cut executive pay, seek concessions from workers and find other ways of reviving their staggering companies.

The Big Three executives also are offering a series of mostly symbolic moves to burnish their images, badly tattered after they arrived in Washington D.C. last month on three separate private jets to plead for a federal lifeline for their struggling companies. All three companies offered separate plans for hearings that will be held Thursday and Friday.

That approach the auto executives took last month led Democratic congressional leaders to declare they didn’t come prepared to justify their pleas and they told them to go back home and ready a new plan.

This week, the automakers are going out of their way to show deference to lawmakers and a willingness to flog themselves for past mistakes. “I think we learned a lot from that experience,” Ford CEO Alan Mulally told The Associated Press in an interview.

Mulally said he’d work for $1 per year if his firm had to take any government loan money. The company’s plan also says it will cancel all management employees’ 2009 bonuses, scrap merit increases for its North American salaried employees next year, and sell its five corporate aircraft.

And for this week’s appearances here, all three company chiefs will skip the lavish travel arrangements. Mulally is coming by car from Detroit for this week’s second round of congressional hearings on government help for the Big Three. GM Chief Rick Wagoner will drive a Chevrolet Malibu hybrid sedan for the 520-mile trek from Detroit to Capitol Hill, spokesman Tony Cervone said Tuesday. And Chrysler LLC CEO Robert Nardelli won’t travel by corporate jet, but a spokeswoman declined to elaborate on his travel plans, citing security reasons.

The unions were preparing to make sacrifices as well. United Auto Workers leaders summoned local union leaders from across the country to an emergency meeting Wednesday in Detroit to discuss concessions the union could make to help auto companies get government loans.

U.S. automakers are struggling to stay afloat heading into 2009 under the weight of an economic meltdown, the worst auto sales in decades and a tight credit market. General Motors, Ford and Chrysler went through nearly $18 billion in cash reserves during the last quarter, and GM and Chrysler have said they could collapse in weeks.

Meanwhile, the auto companies released new sales numbers that underlined the punishing business environment facing the Big Three. Ford said its November U.S. light vehicle sales tumbled 31 percent amid a continued slump in consumer spending and tight credit markets. Sales at Toyota, Japan’s No. 1 automaker, fell 34 percent despite its extension of zero-percent financing on a dozen vehicles.

Ford’s blueprint said it would invest $14 billion over the next seven years to boost its vehicles’ fuel-efficiency, and improve the overall efficiency of its fleet by an average of 14 percent next year. And Ford is calling for a new partnership among automakers, parts suppliers and the government to develop new battery technologies domestically, so the U.S. doesn’t have to rely on foreign batteries — as it now does on foreign oil — to power its cars.

GM will outline efforts to negotiate swapping some of the company’s debt for equity stakes in the automaker, either shares or warrants for them, said two people briefed on the company’s plan.

With eight separate brands, GM will also discuss efforts to shed brands but it would prefer to sell them instead of shutting down Pontiac, Saturn or Saab, said one of the people briefed on the plan. Killing off brands, like GM did with Oldsmobile in 2004, would require cash the company doesn’t have, the person said. The people briefed on GM’s preparations didn’t want to be identified because the plan hadn’t been completed.

Chrysler is expected to outline changes that would include a swap of debt in the company for equity stakes and reductions in some vehicle models, according to a person who was briefed on the plan. The person spoke on condition of anonymity because the discussions were private.

GM, according to its quarterly report filed with the Securities and Exchange Commission, owes creditors $45 billion and it must pay more than $7.5 billion early in 2010 to a UAW-administered trust fund that will take over retiree health care payments.

Ford owes more than $26 billion, with $6.3 billion due to its UAW trust fund at the end of 2009. Chrysler, a private company, does not have to open its books, but its CEO, Nardelli, has said it would be difficult for the company to make it without federal aid. All three likely are negotiating with the UAW for delays in payments to the trusts.

The companies are resisting calls for bankruptcy, arguing that no one would buy a car from an automaker that may not survive the life of the vehicle.

Democratic leaders in Congress sidetracked legislation to bail out the auto industry Thursday and demanded the Big Three develop a plan assuring the money would make them economically viable.

“Until they show us the plan, we cannot show them the money,” Speaker Nancy Pelosi, D-Calif., said at a hastily called news conference in the Capitol.

She and Senate Majority Leader Harry Reid, D-Nev., said Congress would return to work in early December to vote on legislation if the General Motors Corp., Ford Motor Co. and Chrysler LLC produce an acceptable plan.

The decision averted a likely defeat of legislation providing $25 billion loans for the industry. Reid and Pelosi both said there was no plan in circulation that could pass both houses of Congress and win President George W. Bush’s approval.

While the decision headed off the defeat of one bill, it did not necessarily translate into passage of a different one.

As a result, the fate of hundreds of thousands of auto workers and even of an iconic American industry hangs in the balance.

The chief executives of the Big Three automakers appealed personally to lawmakers for the loans this week, and warned that their industry might collapse without them. In testimony, they said their problem was that credit was unavailable, and not that they were manufacturing products that consumers had turned their backs on.

But whatever support they found sagged when it became known that each of them had flown into Washington aboard multi-million dollar corporate jets. Reid observed that was “difficult to explain” to taxpayers in his home town of Searchlight, Nev.

The automakers are on a tight timeline. Reid and Pelosi said their plan must be turned over to key lawmakers by Dec. 2 They said hearings were possible the first week of December, and Congress may return to session the following week to consider legislation.

Pelosi stressed that whatever the Big Three provided to Congress, it must show they had a plan for “viability and accountability,” meaning that the were transforming theoir industry in a way that it would become competitive, and that they were clear about how the federal loan money was used.

Even if lawmakers return to vote, they are likely to insist on numerous conditions on any loans. One possibility is to seek a partial ownership of the companies. Another is to limit salaries of top executives. A third is to prohibit use of the funds for any lobbying.

Under the new program, homeowners with mortgages held by Fannie and Freddie who are at least 90 days delinquent will be eligible to have their monthly payment reduced to 38% of gross income, as long as they’re not in bankruptcy and can illustrate a hardship or change in financial circumstances. This model, based heavily on a streamlined loan modification program the FDIC is implementing at the failed lender IndyMac, is a strong endorsement of the idea that doing a lengthy analysis of homeowners’ finances is taking too long to make a dent in the nation’s housing woes.

The plan, like most since the bailout fiasco began, is meant to provide short-term help and some interest rate cuts to struggling borrowers. Unfortunately, the larger problem lies with the securities industry itself, long lacking the thorough review required to maintain the integrity of the housing and credit markets.

Simultaneously, the House Democrats Nancy Pelosi and Harry Reid are pushing for the part of the apportioned $700B bailout deal to go directly to Detroit automakers. General Motors is in rapid decline, having lost considerable value in the last two months alone. As President Bush inks a deal to provide immediate relief to banks, the automaker has chimed in with a loud plea for its own help, citing its entrenchment in American job production. Both President-elect Obama and current President George W. Bush understand the importance of the auto industry, but conventional wisdom shows that General Motors has not made the innovations to stay on pace with foreign manufacturers.

However, the Democrats who want to set aside more money for automakers believe that it’s a way to prop up an industry that has long supported U.S. production. In the worst case, G.M.’s job losses and lost revenue could several hurt yet another sector of the American markets.

Its cash cushion has been shrinking by more than $2 billion a month this fall. If that continues, G.M.’s reserves will fall below the minimum of $10 billion in cash it needs to run its global operations by January, the company said in its third-quarter S.E.C. filing.

With Detroit already in decay, and Bush reluctant to give more money to a dying industry, it appears the economy will reel even after the bailout deal is final.

Stocks plunged in the final hour of trading Thursday, sending the Dow Jones industrial average down more than 675 points, or more than 7 percent, to its lowest level in five years after a major credit ratings agency said it was considering cutting its rating on General Motors Corp.

The Standard & Poor’s 500 index also fell more than 7 percent.

The declines came on the anniversary of the closing highs of the Dow and the S&P. The Dow has lost 5,585 points, or 39 percent, since closing at 14,198 a year ago. The S&P 500, meanwhile, is off 655 points, or 42 percent, since recording its high of 1,565.15.

Thursday’s sell-off came as Standard & Poor’s Ratings Services put GM and its finance affiliate GMAC LLC under review to see if its rating should be cut. GM has been struggling with weak car sales in North America.

The action means there is a 50 percent chance that S&P will lower GM’s and GMAC’s ratings in the next three months.

S&P also put Ford Motor Co. on credit watch negative. The ratings agency said that GM and Ford have adequate liquidity now, but that could change in 2009.

GM led the Dow lower, falling $2.15, or 31 percent, to $4.76, while Ford fell 58 cents, or 22 percent, to $2.08.

“The story is getting to be like that movie Groundhog Day,” said Arthur Hogan, chief market analyst at Jefferies & Co. He pointed to the still-frozen credit markets, and Libor, the bank-to-bank lending rate that remains stubbornly high despite the Fed’s recent rate cut.

“Until that starts coming down, you’ll be hard-pressed to find anyone getting excited about stocks,” Hogan said. “Everything we’re seeing his historic. The problem is historic, the solutions are historic, and unfortunately, the sell-off is historic. It’s not the kind of history you want to be making.”

According to preliminary calculations, the Dow fell 678.91, or 7.3 percent, to 8,579.19. The blue chips hadn’t closed below the 9,000 level since the June 30, 2003.

Broader stock indicators also tumbled. The Standard & Poor’s 500 index fell 75.02, or 7.6 percent, to 909.92, while the Nasdaq composite index fell 95.21, or 5.47 percent, to 1,645.12.

The Russell 2000 index of smaller companies fell 47.37, or 8.67 percent, to 499.20.

A wave of fear about the economy sent stocks lower late in the final two hours of trading after a volatile start to a day in which major indicators like the Dow and the S&P 500 index bobbed up and down. The Nasdaq, with a bevy of tech stocks, spent much of the session higher but eventually as the sell-off intensified. Still, its losses were less severe because of the relatively modest drops in names like Intel Corp. and Microsoft Corp.

On the New York Stock Exchange, declining issues came to nearly 3,000, while fewer than 250 advanced.

The sluggishness in the credit markets that triggered much of the heavy selling in markets around the world since mid-September appeared little changed Thursday following days of efforts by the Federal Reserve and other central banks to resuscitate lending.

Libor, the bank lending benchmark, for three-month dollar loans rose to 4.75 percent from 4.52 percent on Wednesday. That signals that banks remain hesitant to make loans for fear they won’t be paid back.

The Fed and other leading central banks this week lowered key interest rates to help unclog the credit markets and promote lending to help the global economy. While a rate cut can take up to a year to work its way through the economy, the move was aimed as a boost to investor sentiment.

“We’re stuck in a morass and I think it’s going to take quite some time to come out of it,” said Stephen Carl, principal and head of equity trading at The Williams Capital Group.

Demand remained high for short-term Treasurys, a refuge for investors willing to trade modest returns to protect their money. The yield on the three-month Treasury bill, which moves opposite its price, fell to 0.51 percent from 0.63 percent late Wednesday. Longer-term debt prices fell, with the yield on the 10-year note rising to 3.77 percent from 3.65 percent late Wednesday.

Investors across markets were mulling a plan being considered by the Bush administration to invest in hobbled U.S. banks as a way to stabilize the financial sector. The $700 billion rescue package signed into law last week allows the Treasury Department to inject fresh capital into financial institutions and obtain ownership shares in return.

Britain rolled out a similar plan, though no U.K. bank has received any investments. In Iceland, the government now has control of the country’s three major banks as it struggles to contain the troubles there.

Wall Street is also looking for any effects of short selling now that a three-week ban imposed by regulators has expired. Short selling is a technique in which investors borrow shares in a company from a broker and sell them, hoping to buy them back later at a lower price. Essentially, it’s a bet that a stock’s price will fall. Short sellers can lose money if they have to repurchase the stock after it has risen.

Some analysts believe the unprecedented ban on short selling — an effort to bolster investor confidence — did more harm than good at a time of historic market volatility. They contend that short sellers help the market rally by covering their bets and creating demand for stocks.

“I think the market’s way oversold. But I can’t stand in the way of this falling knife — I’d get sliced open,” said Phil Orlando, chief equity market strategist at Federated Investors. “Investors are just saying, get me out at any price.”

He also said that with the short-selling rule back in play, hedge funds might be shorting again to make up for their forced liquidations.

Volume on the NYSE came to 2.04 billion shares.

In Asia, Japan’s Nikkei 225 closed down 0.50 percent while the Hang Seng added 3.31 percent. In Europe, Britain’s FTSE-100 fell 1.21 percent, Germany’s DAX fell 2.53 percent, and France’s CAC-40 declined 1.55 percent.