Republicans are shy of federal bailouts, and Democrats are appalled by the prospect of job losses that go far beyond the 240,000 people directly employed by Detroit's Big Three of GM, Ford and Chrysler. Another 644,000 work in companies that supply components to Detroit, and they in turn help employ a total of some 3 million Americans in the steel, plastics, computer, glass and tire industries.

But here are the facts that Congress is missing. First, the Republicans do not seem to understand that a GM bankruptcy would not save money for the U.S. economy. The healthcare and pension obligations would simply shift to state welfare, Medicare and Medicaid and the pension guarantee system.

There are 479,000 retirees getting GM pensions. The Pension Benefit Guaranty Corp. pays out a maximum of $40,000 a year to each one, or $20 billion a year for them all. That is what Uncle Sam would have to start paying if GM folds, so in that context a $25 billion loan to GM looks rather more sensible.

Second, a Chapter 11 bankruptcy filing would likely hit sales hard, as consumers fear that multiyear warranties and their local dealerships and future supplies of spare parts might not be reliable.

Third, there is a strategic aspect to the U.S. auto industry. It is a critical part of the national industrial base and the economy as a whole, as well as the defense sector.

Although GM no longer plays the heroic role it did in World War II, since even modern military trucks are too specialized for Detroit, the Pentagon has some concerns here. Detroit is the key partner in the Army's Tank Automotive Research, Development and Engineering Center and the Fuel Efficient Ground Vehicle Demonstrator Project. Detroit Diesel and ArvinMeritor are irreplaceable links in the military's long supply chain.

Fourth, GM outside the United States is not a basket case. It is profitable in Europe, Latin America, Asia and the Middle East. GM upped its profits in Europe by 65 percent last year -- the best it's done across the Atlantic since 1996. GM also posted records in Asia, Latin America and the Middle East. In China, GM leads all automakers in sales. In 2007 volume sales rose 20 percent for GM in China compared with 2006, and GM became the first manufacturer to sell 1 million vehicles in China.

This may not last. Opel, the German wing of GM, is applying to the Berlin government and to Brussels for restructuring aid under the European Union's proposed scheme to help its auto industries retool for a green future. But Opel, like the British wing of GM known as Vauxhall, is looking hard at buyout options.

Even in these days of a car glut, they should have little trouble finding investors. Cash-rich oil-exporting nations might find GM's European operations a useful fit. Consider, for example, the marketing possibilities of free gasoline for a year from the Kuwaiti-owned Q8 chain of gas stations.

Fifth, the world is not going to stop buying cars. Quite the reverse; the growing wealth of the developing world means a boom is on the way. There are now 800 million vehicles on the world's roads; by 2020 there are expected to be 1.5 billion, with strong growth in China, India and other emergent markets. Congress might ask itself whether this future market is too attractive to be left to non-U.S. manufacturers.

Of course, the prospect of 1.5 billion gas-powered automobiles is a daunting one for the environment. But in the Volt, GM has an electric-powered (but still hybrid) car coming to market within 18 months that could become a market leader. Ford and Chrysler have hybrid vehicles already, and fully electric and fuel-cell cars are in development. Is this to go to waste, or to be bought up cheaply in a bankruptcy sale by a Chinese or Indian manufacturer?

Sixth, it is important to remember that GM and Ford are well advanced on the restructuring path, after new agreements with the labor unions, improved quality and models, and ongoing reform of its sprawling dealer network. GM's deal with the United Auto Workers union to fund a voluntary employee beneficiary association has ended its $50 billion liability in unfunded benefits. This has already saved GM $5 billion. Moreover, healthcare reform, a likely priority of the incoming Obama administration, could shift the remaining burden of health costs from companies to a national insurance system that should further relieve the auto industry's current high cost structure.

Congress should also remember that what had been a belated but credible rebuilding effort by the industry was ambushed by the Crash of '08, which sent U.S. new car and truck sales down from 16 million in 2007 to 13 million this year. GM's current North American operating costs of $31 billion a year at its 24 plants need to be slashed by at least a third. This is happening. Three plants are already slated for closure.

More needs to be done. Another five probably should go, along with doomed brands like Pontiac, GMC and maybe Saturn. GM's sprawling and swollen dealership network needs heavy pruning, which means heavy costs for ending contracts. (A bankruptcy would save those costs but bring local misery to some 4,000 small-town dealerships across the country.)

Finally, if Congress decides against a bailout for GM, this need not be the end of the world. Remember the U.K. experience, after Prime Minister Margaret Thatcher refused further subsidies to British Leyland, the last U.K.-owned major manufacturer. The United Kingdom now manufactures and exports more cars than it did then and employs more people in the car industry. Given the manufacturing presence of Honda, Toyota, BMW, Mercedes and Hyundai, the U.K. experience may well be repeated in the United States, even if Ford and GM collapse.

And at today's rock-bottom prices, with the current share price meaning that Ford and GM both could be bought for less than $10 billion, quite a few foreign companies will be interested in the modernized plants, the Volt car and the dealership network. The only question is whether Congress wants the United States to stay in the mass-market auto industry. Lots of other countries will be only too keen to take over.

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