The 7 worst ways to rescue Detroit

Word is that the 3 automakers have submitted their plans to the US Congress and that a completed proposal and a vote are close. GM is in the most dire straits. Chrysler and GM require immediate cash or else they may face bankruptcy. Ford may be being overly optimistic, but they didn't request an immediate loan, only a line of credit - in other words, Ford's death isn't imminent.

An article on MSN Money argues that, among other things, Congress shouldn't treat all the automakers identically.

They're not alike, and an up-or-down vote on GM, Ford and Chrysler as one monolith would be a clumsy way to spend taxpayer dollars.

Chrysler, the smallest of Detroit's Big Three, appears to be in the worst financial shape, with a thin margin of cash to see it through the rest of the year. It also has the weakest lineup of cars and few announced future products -- signs that management is hunkering down and preparing for some kind of merger or even liquidation.

In other words, Chrysler isn't cutting it as a stand-alone automaker. "Chrysler is the only one of the three that could go out of business without having a huge domino effect," says analyst David Silver of the research firm Wall Street Strategies. It's also owned by the private-equity firm Cerberus Capital Management, run by billionaire Stephen Feinberg.

GM and Ford are both public companies committed to long-range plans, but their needs are different. GM is desperate for cash and says it needs help now. Ford is further along in its turnaround plan, and CEO Alan Mulally says the company doesn't need any federal loans at the moment.

An across-the-board bailout of all three would commit taxpayer money to at least one company, Ford, which might do OK without it. And it would represent another unprecedented move: the bailout of a private-equity firm, whose principals earn way more than an overpaid CEO.

Better: Establish standardized ground rules that treat each automaker according to its business prospects, not its political connections or some dubious place in American lore. If it turns out that GM is a good risk but Chrysler isn't, then let Chrysler go. The government may have to pick winners and losers.

If you accept this guy's conclusions, the US government might be best advised to assist Ford, and to let GM and Chrysler reorganize in bankruptcy.

The article also warns against indirectly penalizing Detroit's competitors:

As the Detroit automakers have been complaining about everything that's wrong, a new Detroit has been taking root, mostly in an arc of the South that ranges from South Carolina to Texas. Virtually all of those plants belong to foreign automakers, including Toyota Motor (TM, news, msgs), BMW (BAMFX, news, msgs) and Nissan (NSANY, news, msgs), but they employ thousands of Americans as executives, managers and blue-collar workers.

They're also some of the most efficient auto factories in the nation, often able to switch from one model to another based on what products are most popular. And they buy lots of made-in-America parts.

Any incentives or other policies that stifle demand for cars from such "transplant" factories would undermine one of the healthiest parts of the U.S. manufacturing base.

Better: Consider more incentives to lure foreign automakers to the United States, and make the New Detroit even stronger. Sooner or later, it might be the only Detroit we have left.