by Mona Gallagher

Created on: July 02, 2009

Not long ago, we were told GM was too big to fail and Chrysler was too big to fail. Yet they failed even after receiving billions of dollars in TARP bail-out money. Ford survived the bankruptcies without taking money from the federal government, but the automaker is not on sure footing yet. The future of the big three automakers has been assured, at least in the short term, by the US government. Can the companies survive and thrive long term?

The US has embarked on a mission to cut carbon emissions and Congress is working on a cap and trade bill that will tax violators. Automakers, coal industries, and other energy sources will feel the weight of the bill if it passes both houses of Congress. Automakers will be required to tow the line in order to remain in compliance. They will need to retool for green car production.

Automakers aren't the only industries that will have to retool. Auto suppliers who make parts for the manufacturers will also engage in retooling to meet new specifications. Though GM and Chrysler received bail outs to continue manufacturing autos, suppliers have not been given the same options and must pass the costs along to the auto industries. Foreign suppliers will have similar roadblocks with their production of certain auto parts.

Reasons to question the future of US automakers:

The big three automakers have unionized labor and have not contained costs as well as the auto manufacturers in the southern states that operate under right to work laws. Labor unions periodically negotiate contracts with higher salaries, premium health care, and retirement funds. The salaries and benefits must be factored into the total cost of producing an automobile thus driving up the price.

US automakers are in trouble, in large part, because they've refused to fore go the love affair with gasoline powered cars. Lobbyists buy influence in Washington DC over the types of cars the US produces and that has kept a lid on new technology.

In addition, US automakers have not kept pace with foreign and private auto industries in producing cars and trucks that give both good mpg and reduction of carbon emissions. The UK advertises a new hydrogen car with an at home fuel pump available. Guy Negre, the engineer who worked on the Formula I car has produced a car that runs on compressed air and gasoline. It gets about 106 miles per gallon of gasoline. It's in mass production in India.

In1978, Jack Nicholson drove a solar powered hydrogen car. The US auto industry

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