Unconvinced Congress Tables Auto Decision

"Everyone has their eyes on Washington," he said, "especially in the Midwest."

In a statement, GM said it agreed "completely that there must be accountability to U.S. taxpayers for government support"; Chrysler said it was "ready to provide its plans for returning" to profitability; and Ford vowed to deliver a "great plan that will continue [its] transformation into a lean, profitable company."

Ironically, analysts said, Ford was already on its way to retooling three truck plants to build small cars before the economic meltdown. It was aiming to double hybrid production in 2009 and to introduce several of its small, fuel-efficient European cars to North America. The firm surprised Wall Street by turning a profit in the first quarter of this year.

GM was set to roll out the Chevrolet Cruze, a compact car expected to be competitive with the Toyota Corolla and Honda Civic in fuel economy. It plans to launch its highly anticipated plug-in Chevrolet Volt in 2010.

Chrysler has deeper problems, some analysts said. The company is not big enough to compete in North America, nor is it equipped to transform its business with the promise of an electric car. As Chrysler chief executive Robert L. Nardelli told lawmakers this week, his firm is "looking for alliances, partnerships, opportunities to get further synergies across the auto industry."

"This government loan is an attempt to try to make things at Chrysler healthier, so that it can attract a foreign partner," said Aaron Bragman, an auto analyst with Global Insight.

In two congressional hearings -- one Tuesday before the Senate Banking Committee and another Wednesday before the House Financial Services Committee -- Nardelli, GM's G. Richard Wagoner Jr. and Ford's Alan R. Mulally failed to coherently lay out those goals, lawmakers said, or make a compelling case for how federal aid will help achieve them.

"We kept asking: 'What are you going to do with the money?' And they said: 'We're going to save the industry.' And we said: 'Well, how are you going to save the industry?' And they said: 'We're going to spend the money,' " recalled Sen. Robert F. Bennett (R-Utah), who quizzed the executives on Tuesday. "Even those who were very sympathetic walked away from that saying: 'What can I vote for out of this?' "

Rep. Barney Frank (D-Mass.), who chaired Wednesday's hearing in the House, said many lawmakers found it difficult to support a bailout for the auto industry so soon after approving a $700 billion rescue for the financial sector that has failed to calm to the markets. Instead of making more loans, some banks are hoarding the money or using it to buy weaker firms. So when the auto executives provided evasive answers, Frank said, many lawmakers experienced a bad case of déjà vu.

"There's deep skepticism about these things," Frank said. "Many people think we gave too much discretion the last time."

It didn't help that the auto chieftains traveled to Washington in private jets, a symbol of privilege "that doesn't send a good message to the people in Searchlight, Nevada," Reid said of his home town. Nor did it help that they were unable to promise lawmakers "that this government bailout will be its last." Some analysts have said the industry may need $50 billion or more to see it through what is expected to be an extended economic downturn.

Those missteps badly hurt the industry's cause, lawmakers in both parties said, and left congressional leaders without the votes to push a bailout through the House and Senate.