For an older generation of Americans—those who remember the days when imports were rare—it is inconceivable that the Big Three could go under. But we live in very difficult times. History tells us that once the consumers sense that a major company may go under, their products are avoided. No one wants an orphan car. As we learned with Packard and Studebaker, the announcement of bankruptcy is tantamount to a death notice in the media. When GM pulled the 100-year-old Oldsmobile brand, it went unnoticed by most of us. Few realized what it represented, perhaps the beginning of the end of a company whose name is so closely associated with American industrial muscle and inventiveness. In retrospect, the death of Olds was equal to the extraction of Lehman Brothers on Wall Street, the symbolic transformation of our economy, the start of hard times.

But the prospect of the entire Big Three melting into industrial history is different. Ford, GM and Chrysler represent the essence of our industrial might and are as closely linked with our economic success as other flagship names such as Macy’s or Boeing. There are those who would say we can live without them; let them go bankrupt since they cooked their own goose. This is very shortsighted. If GM goes under, it is estimated it would take 2.2 million jobs with it. The Big Three is as important for the nation and its recovery as Citigroup or Fannie and Freddie. If our car industry collapses, it would be one of the greatest disasters in our history, taking with it the assembly lines and suppliers, the tire manufacturers and electronics providers, glass workers, and the countless suppliers and small stores that keep it afloat. Imagine what would happen if all of the U.S. car dealerships were sucked down in an economic whirlwind, a death sentence to many localities. They must be bailed out.

That said, they have to come up with a recipe for their survival. Loans from Washington or a bailout will only buy some time. Clearly, GM has too many brands (eight) in its stable of cars and too many models (70) in a highly competitive market. Toyota, its biggest rival, has two brands (Toyota and Lexus) and roughly 30 models. Collectively, the Big Three has 112 different models of cars and trucks across 15 brands; Toyota, Nissan and Honda have only 58 models. It is time for GM to stay with its winners—Caddy, Chevy, the GMC truck division—and collapse Buick and Pontiac under the Chevy name. For Ford and GM, some of their offerings must be targeted for limited production, keeping the market niche for the Crown Vic (police and cabs), Hummer (military production), and versions of sports models such as Corvette and Mustang. As for the Saturn, it should be returned to its Opel roots in Germany. Ford should also jettison the Mercury since it is excessive duplication. Lincoln should remain as one model, the jewel in the lineup. Chrysler’s future is conditional at best. Its days of offering passenger cars may be a thing of the past.  If it cannot merge with GM or Ford, it may consider keeping Jeep, its truck division and engine production that in years past served the military.

Detroit will best serve the nation and the world by concentrating on what it always did best: producing first-rate engines that use gas and now flex fuels. Lightweight and fuel efficient engines are already in mass production.

It is a paradox that what helped sink Detroit in the present may save it. Americans will have a depreciated standard of living in the coming years. In difficult times, most people think of the prosperity of their own nation first even in a global economy. In time, they may turn inward and come to see the success of domestic industries inextricably connected to their own prosperity and the revival of the economy.

At the end of the day, price may be the key determinant as millions tighten their belts. But for the moment, the key is the saving of Detroit from ruin and let historians analyze how they got into such a mess. We need a healthy car industry for many reasons, including the production of vehicles for the military. It would be a sad day for America to come, hat-in-hand, to others for our security needs. A massive bailout is essential, an investment in our industrial future.

If it does not happen fast, the great car companies will soon join Packard, Studebaker, Nash, Hudson, Cord, and so many more nameplates as today’s collector cars and symbols of what happens when bankruptcy is declared.

-- Sander A. Diamond