WSJ.COM/Morning Brief: Detroit's Latest Tale Of Woe And Want

More details, and more desperation. That's what the Big Three U.S. car makers brought to Washington with their renewed requests for government aid in a preview of their top executives' return to Capitol Hill later this week.

The latest sales numbers only added to a bleaker picture for Detroit since those executives were derided during their last plea for Congressional solace. In November, General Motors Corp.'s (GM) sales were down a whopping 41% - with buyers apparently scared off by talk of possible bankruptcy filings - while Chrysler's sales were down 47% and Ford Motor Co.'s (F) off 31%, as BusinessWeek reports. Foreign competitors didn't fare better. Toyota Motor Corp.'s (TM) sales fell 34%, and Honda Motor Co.'s (HMC) 32%.

GM's presentation to Congress included a new admission that it requires an immediate boost of $4 billion just to keep operating through the end of the year and $18 billion in loans - a level $6 billion greater than GM said it needed two weeks ago, as The Wall Street Journal notes. Chrysler requested $7 billion by Dec. 31 and $6 billion in funds from the Department of Energy's program promoting fuel-efficient vehicles, while Ford asked for a $9 billion government line of credit from the government, even as it asserted it may not have to use it. Ford also wants $5 billion from the DoE program. In comparison, GM seems in much worse shape.

"There is no Plan B," Fritz Henderson, GM's president and chief operating officer, said in the presentation, as the Los Angeles Times reports. "Frankly, the shortage of liquidity does focus the mind." Ford Chief Executive Alan Mulally said on of his biggest worries is the prospect of a failure at GM and how that would reverberate through the whole domestic auto industry. "We are very, very concerned, and that's why we went with GM and Chrysler to Congress even though we think we have sufficient liquidity," he tells the New York Times. Mulally, GM Chairman Rick Wagoner and Chrysler Chairman Robert Nardelli are set to appear again before Congress on Thursday and Friday.

However their pleas are received in Washington, the Detroit News says that "one thing is certain: The crisis will dramatically reshape the U.S. auto industry. Detroit's Big Three will survive only as smaller, leaner operations with a strong focus on producing fuel-friendly vehicles." All three presentations offer visions of "more fuel efficient and smaller vehicles while promising new concessions on executive salaries and corporate travel," and GM's includes the elimination of tens of thousands of jobs, the closure of nine factories, a 25% reduction of its dealer network and "shrinking, selling or shuttering at least four of its eight brands - Saab, Pontiac, Saturn and Hummer, which account for 17% of its sales," the paper reports.

The Big Three's many missteps and roles in their own downfall are well documented. Still, with the implications for the broader U.S. economy now widely feared, the auto makers are likely to get a more sympathetic hearing than they did last month. But that doesn't mean Congress is ready to help. House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid on Tuesday both expressed a desire to enact some kind of aid package, "but they have yet to remove the stumbling blocks that kept them from moving forward in November," The Hill points out. "The Bush administration and Democratic leaders are at a stalemate over where the money would come from, and some Republicans still believe letting the automakers file for bankruptcy is a better option than sending taxpayer dollars their way in a troubled economy," the paper says.

At the same time, people familiar with the matter tell the Journal that "lawmakers have begun reaching out to Wall Street experts to explore how the government could help the companies prepare bankruptcy filings that would take them in and out of Chapter 11 protection quickly, with much of the financing and other restructuring measures worked out with creditors in advance." One idea for a "prearranged bankruptcy" for GM or Chrysler would be to have Washington come up with as much as $40 billion to pay for a bankruptcy reorganization for the car makers, the Journal reports. Though both GM and Chrysler don't consider bankruptcy protection a viable option - leaving customers unwilling to buy their cars out of fear the warrantees could be worthless - the Journal says that "bankers and other financial experts are telling lawmakers that bankruptcy is the best option for creating smaller but viable U.S. car companies."

   Also Of Note... 

Wall Street Journal: India has accused a senior leader of the Pakistani militant group Lashkar-e-Taiba of orchestrating last week's terror attacks that killed at least 172 people here and demanded the Pakistani government turn him over and take action against the group. Just two days before hitting the city, the group of 10 terrorists who ravaged India's financial capital communicated with Yusuf Muzammil and four other Lashkar leaders via a satellite phone that they left behind on a fishing trawler they hijacked to get to Mumbai, a senior Mumbai police official said, adding that the entire group also underwent rigorous training in a Lashkar-e-Taiba camp in Pakistani-controlled Kashmir, the official said. It also emerged that U.S. authorities had warned Indian officials of a pending attack by sea.

Atlanta Journal-Constitution: Republican U.S. Sen. Saxby Chambliss beat back a prolonged challenge from Democrat Jim Martin to win a second term in office after a bruising four-week runoff. Chambliss' double-digit victory dashed Democrats' dreams of securing a filibuster-proof, 60-vote "super majority" in the Senate and buoyed a Republican Party battered by staggering losses in the Nov. 4 general election.

USA Today: The U.S. military has launched a massive legal review to build criminal cases against at least 5,000 detainees considered dangerous in an effort to keep them behind bars when Iraq's government assumes legal authority over them. Under the terms of the recently approved U.S.-Iraqi security agreement, the detainees can be held only if they are charged under Iraqi law.

Government Executive: Federal employee unions reacted angrily to an executive order from the departing Bush administration that strips collective bargaining rights from thousands of employees at five departments. The executive order also affects about 8,600 workers in divisions of the Energy, Homeland Security, and Transportation departments who "have as a primary function intelligence, counterintelligence, investigative or national security work."

Washington Post: With President-elect Barack Obama vowing to plow hundreds of billions of dollars into the nation's infrastructure, some state officials are warning that public works projects will fail to effectively lift the country out of recession unless they are chosen carefully and implemented rapidly.

Roll Call: Democratic Rep. Xavier Becerra is mulling an offer to become the U.S. trade representative in President-elect Obama's White House, several Democratic sources confirmed.

Financial Times: The European Commission promised more flexibility in how it applies state aid rules to banks hit by the credit crisis after governments lashed out at the difficulties in getting European Union approval for bailouts.

Times of London: British Airways PLC (BAIRY) is in merger talks with the Australian airline Qantas Airways Ltd. (QAN.AU) in a deal that could create the world's first global airline. BA also has been discussing a merger with Iberia (IBLA.MC), the Spanish national carrier, and hopes to expand its alliance with AMR Corp.'s (AMR) American Airlines. The combination of the four would create the largest airline in the world, which would be capable of carrying 198 million passengers a year - nearly six times BA's current traffic.

Bloomberg: Electricite de France, the world's biggest operator of nuclear reactors, bid $4.5 billion for half of Constellation Energy Group Inc.'s (CEG) nuclear power business to thwart a competing offer from Warren Buffett.

Guardian: A series of papers published Wednesday by the Lancet medical journal in collaboration with the Royal College of Paediatrics and Child Health paints a grim picture of the unseen sufferings of children in the U.K. and other high-income countries. Between 4% and 16% of children suffer physical abuse, such as hitting, punching, beating and burning; at least 15% of girls and 5% of boys have suffered forms of sexual abuse; and around 10% of children every year suffer emotional abuse, which includes persistently being made to feel worthless, unwanted or scared, the paper says.

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