Chrysler wants Congress and the new administration to understand something. It will cut its business costs as much as necessary, even if it risks going out of business. The firm gets the message that it is better to bleed to death than to go to the federal government with a survival plan that has too high a cost base.

According to The Wall Street Journal, "The auto maker, which is getting $4 billion in emergency loans, aims to submit a restructuring plan that shows how Chrysler plans to shrink its operations in response to the steep decline in auto sales in the last six months." That may mean chopping its white collar workforce down to only the most crucial personnel, closing more plants, working with the UAW to tear down labor costs, and perhaps even cutting some models.

The move carries tremendous risks. Chrysler's share of the US market is estimated at about 12%. It has no big overseas operations like GM (NYSE:GM) and Ford (NYSE:F) do to help its earnings. If it cannot do well in the America, it cannot do well at all.

Chrysler's largest risk, aside from going into bankruptcy in the next few months, is that its market share continues to drop and falls so far that it cannot even manage to carry the most modest costs of designing and building cars. It will have reduced itself out of existence.

GM has the advantage of a 21% market share in America and huge businesses in Europe, South America, and China. But, the largest US car company cannot go back to the government without being able to demonstrate that every last labor and manufacturing cost has been sacrificed. Even the smallest bit of fat could cost the company its independence.

Douglas A. McIntyre is an editor at 247walls.com.

The Wall Street Journal reports (subscription required) that General Motors (NYSE: GM) and Chrysler have reopened merger talks after Cerberus Capital Management, the company in the unenviable position of owning Chrysler, announced its willingness to give up part of its stake to get a deal done.

It's a nice public relations move designed to make it look like the company is doing its part to get a bailout done, but that's about it. Daimler AG, which still owns just under 20% of Chrysler, has already said that the equity in the deal is now worth zero. So Chrysler is trying to toss in nothing and call it a concession. Cerberus has still not indicated a willingness to pump any more cash into Chrysler -- that's the taxpayer's job!

Meanwhile, Chrysler shut down its factories for a month to conserve cash. The company is also socking it to its dealers with tighter terms. Dealerships will be fined (subscription required) for any new cars that languish on their lots for more than 360 days and will have to pay off the balances on any used cars that remain unsold after six months.

Given the way the car industry is right now -- with many dealers losing huge sums of money as they struggle to stay in business -- this could put more than a few dealers out of business. But given the number of dealers that the domestic car companies have relative to their foreign counterparts, that's something that will have to happen eventually anyway.

DaimlerChrysler AG (NYSE: DCX) isn't the only automaker making news today. The Fords apparently are looking to sell off some of their stake in Ford Motor Co. (NYSE: F).

Chairman Bill Ford briefed the board on the views of the family before the company's annual meeting last week, according to Bloomberg News, which added that some Fords have urged the hiring of the investment bank Parella Weinberg Partners on a share sale or other alternative strategies.

The Fords, like other shareholders of the automakers, have seen the value of their shares plunge to $584 million from $2.3 billion since BIll Ford became chairman eight year ago, Bloomberg News said. The family also lost about $85 million in annual income when Ford quit dividend payment in September, the news service said.

Though the Fords are still plenty rich, their concerns are understandable. It's generally a bad idea to have a large portion of your network tied up into one thing, so some family members may be looking to diversify their portfolio. Whether it goes beyond that will be interesting to watch.

Family pride in owning a business can be a powerful thing. Just look at the turmoil the Bancrofts are going through because of Rupert Murdoch's unsolicited bid for Dow Jones & Co. (NYSE: DJ).

If the Fords ever decided to sell their stake outright, private equity buyers would be lining up around the block to buy it.