The automakers predicted that if one or more of them filed for bankruptcy, the resulting effect on their businesses and the American economy would be devastating.
In a submission to Congress, General Motors said that without government support "the company will default in the near term, very likely precipitating a total collapse of the domestic industry and its extensive supply chain, with a ripple effect that will have severe, long-term consequences to the U.S. economy."
While it's not uncommon for a company to file for bankruptcy, reorganize its businesses and then return to financial stability, the companies and some analysts have argued that such a scenario wouldn't prove true for the automakers.
The companies, said Rebecca Lindland, an analyst with IHS Global Insight in Lexington, Mass., would likely have to file for Chapter 7 bankruptcy protection, which requires a company's liquidation rather than restructuring.
"Part of the reason that we don't see that recovery is really viable is that people have consistently said they would not buy a car from a bankrupt company," Lindland said.
In its submission to Congress, GM said that market research showed more than 30 percent of consumers who had considered buying GM cars but ultimately decided to buy another brand cited the possibility of GM bankruptcy as their top reason.
Experts say that some consumers would worry that a bankrupt automaker wouldn't be able to honor its warranties or that parts needed for repairs wouldn't be available.
Ron Harbour, a Detroit-based auto industry analyst with the consulting firm Oliver Wyman, said it's also about image.
"Let's say that you buy that car from a company that is bankrupt," he said. "You drive it home and your neighbor goes, 'you bought a car from them? Why would you do that?'"
While experts say that, for now, Ford is less likely than GM and Chrysler to file for bankruptcy protection, they're not ruling it out. If one of its rivals files for bankruptcy, it would actually make Ford more likely to seek bankruptcy protection down the road, they say.
The company is dependent on many of the same auto parts suppliers as GM and Chrysler. If a GM or Chrysler bankruptcy forces parts manufacturers out of business, Ford may find it difficult to continue making cars. Ford has cited the parts issue as a reason why it supports aid for GM and Chrysler.
Ford may also suffer from a public relations problem if GM or Chrysler enters bankruptcy: Consumers could lose confidence in the U.S. auto industry overall, analysts said, and choose foreign automakers rather than Ford.
"If Chrysler and GM were gone tomorrow," Harbour asked, "would people look at Ford and say 'they're just like them'?"
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