While it is a stretch to describe GM and Chrysler as financial services firms so they can qualify for some of that bank bailout money, it's not as far fetched as it would seem. In recent years, financial services accounted for 40% of all corporate profits. And as I posted in January 2006, a look at its financial statements made it clear that GM has turned itself into a bank that happened to sell cars: "for the first nine months of 2005, GM limited its $6 billion in vehicle operating losses due to the $2.2 billion it made financing those vehicles."

I would imagine that bankruptcy filings could be in the future of GM and Chrysler since they have probably exhausted all other forms of private financing. This could change, though, depending on tomorrow's election result. John McCain has made it clear that the $25 billion is enough of a government handout for the auto industry; however, Barack Obama wants government to do more to help the industry.

I think that the industry's best short-term hope is that plummeting gasoline prices bring people back to the showrooms for those popular gas guzzlers that fueled the auto industry profits earlier in the decade. Unfortunately, that would lead them to defer again the decision to build a new breed of electric-powered vehicle that does not ship hundreds of billions of dollars worth of our money, in the form of gasoline payments, to people who don't like us very much.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in the securities mentioned.