Since General Motors and Ford published disastrous quarterly results last Friday -- bringing losses for the two so far in 2008 to nearly $US30 billion -- their cries for help have grown more desperate.
The US auto giants say that a $US25 billion package of government loan guarantees for the development of fuel-efficient vehicles, passed in early September but still not released, is not enough.
They want another $US25 billion to forestall their collapse; GM is warning it only has the cash on hand to last a few more months.
Obama, whose election on November 4 was seen as a rebuff to President George Bush's Republican party, stressed in his first news conference as president-elect last Friday that the auto industry "is the backbone of American manufacturing," and he pressed both Congress and the Bush administration to take action to help it.
At the same time Congressional leaders asked Treasury Secretary Henry Paulson to allocate some of the $US700 billion bank bailout to the hurting Detroit Big Three automakers GM, Ford and Chrysler.
And at a private meeting in the White House on Monday, Obama encouraged the lame-duck president to urgently free up the aid.
But White House spokeswoman Dana Perino Tuesday pushed the ball back to Congress, saying the White House might move on more auto industry aid if Congress provides it additional authority in making use of the finance industry bailout funds, "so that we can accelerate those loans to viable companies."
But GM, which employs about a quarter of the million workers in the US auto industry, says time is running out.
"I'd question whether the US industry as a whole could survive that without support," GM chief executive Rick Wagoner said Monday of the crash in auto sales.
He added that even with government help the automaker will have to do "significantly more restructuring" to remain alive.
GM, Ford and Chrysler have been burning through cash for many months to adjust to a shift by buyers to smaller, more energy-efficient cars. But meanwhile sales of their existing models have plunged with the meltdown of the US economy.
This year, the US car market is likely to have its worst year since the early 1980s, analysts say, with a more than 25 per cent fall in sales from 2007, according to some estimates.
All three are also in the middle of sweeping restructuring programs to regain competitiveness against Asian rivals like Toyota and Honda. But with the market shrinking, they have so far not been able to realise the gains of these programs.
GM is the most troubled of the three; Ford and Chrysler are seen to be somewhat more stable for the moment.
On Monday GM shares closed down a sharp 23 per cent after an analyst forecast their price would fall to zero.
"We are lowering our target on GM equity to zero dollars," a Deutsche Bank report said.
"Even if GM succeeds in averting a bankruptcy, we believe that the company's future path is likely to be bankruptcy-like," it said, meaning that after higher-ranked lenders are paid back, there would be nothing left for shareholders.
At midday Tuesday, GM's price had fallen another 15 per cent to $US2.85 dollars, compared with $US30 a year ago.
Analysts say that GM alone needs an injection of $US35 billion to shore up its cash reserves and finance its restructuring through 2010.
With the crash in US stock markets, too, neither GM nor Ford has been able to go to the market to raise cash. Shareholders have all but given up: at below three dollars for GM and two dollars for Ford, their share prices are in territory unseen since the 1950s.
